Labour Minister: Azerbaijan has no restrictions for creation of private pension funds


February 18, Fineko/ There are no legislative restrictions on the application of the private pension fund system in Azerbaijan.

Labor & Social Protection Minister Sahil Babayev has stated that there are no legislative restrictions for this, and every citizen can apply for creation of a private pension fund.

"It is hardly enough to have legislative framework for operation of the system. Commercial aspects of the issue should be studied and defined. In particular, its profitability that is directly related to the indicators of the labor market, incomes and wages of the population," the minister emphasized.

He pointed out that such a function is currently performed by life insurance companies, which receive enough benefits to provide this type of activity.

"Insurance companies render services on cumulative life insurance that is the first step in creation of private pension funds," Babayev said.

The minister noted that activity of this model is linked with development of the pension system and the labor market.

"Creation of private pension funds is the fourth stage of reforming the insurance pension system. The first stage is basic or minimum, the second stage is insurance part of pensions, the third is cumulative and the fourth is voluntary. We have the insurance part. The accumulative part is only developing, so we’ll need more time," the minister said.