Georgia’s new pension system comes into play
Starting from January 1, 2018 the accumulated pension system is mandatory for legally employed people under 40. Photo: N. Alavidze/Agenda.ge.
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This month, the employed in Georgia will transfer money to the country’s pension savings system for the first time, as it was launched on January 1, 2019.
Starting from January 1, 2019 the accumulated pension system is mandatory for legally employed people under 40, meaning they will be enrolled automatically. For the self-employed and those above the age of 40, enrolment in the programme is voluntary.
The special website pension.ge and the national system of pension deposits administration were launched today to allow citizens to better administer their funds accumulated in the pension system.
The pension savings system applies to Georgian citizens, foreign citizens living in Georgia with permanent residency in the country and stateless persons who are employed or self-employed and receive an income. This system applies to employees of both the public as well as private sectors.
The system will work on a 2+2+2 scheme. Each employee, employer and the government will make a contribution of 2% of the gross volume of the employee’s income to an individual retirement account. As for the self-employed, they will make a deposit of 4% of their income, and the state will match another two per cent.
The new law on pension savings does not envisage the annulment of the current pension system.
On January 1, 2018 pensions increased by 20 GEL in Georgia and amounted to 200 GEL monthly.
Several major changes came into play on January 1, 2019. One of the changes is the accumulated pension system – the new programme is mandatory for legally employed people under 40, meaning they will be enrolled automatically. For those above the age of 40, the programme is voluntary, as it is for self-employed citizens.
The parliament of Georgia approved a law on an accumulative pension system yesterday, which is part of a larger pension reform initiated by the Georgian government. The government plans to launch a supplementary programme alongside the currently existing universal basic pension which amounts to 180 Gel.
About 35,000 people in Georgia will receive increases pension from today following the Government’s pledge to allocate an additional 90 million GEL y/y for Georgia’s retired community and disabled persons.
The Government of Georgia plans to launch a new type of pension system known as the accumulated pension program starting from the next year.
A total of 747,774 employed people in Georgia are involved in the accumulative pension system, while both pension contributions and interest amounts total 174,047,572 GEL (about $64.46m/€57.31m), says Director of the Pension Agency Levan Surguladze.
A total of 232 million GEL (about 83.30m/€74.42m) has been accumulated in Georgia’s accumulative pension system in the first 150 days of operations of the Georgian Pension Agency, the agency that manages the pension system.
The Georgian Pension Agency’s Investment Board has elected a new chair – Olivier Russo. His first deputy will be Jean-Frederick Polsen, announced the director of the pension agency, Levan Surguladze.
Director of the Pension Agency Levan Surguladze has confirmed that he has submitted his resignation letter a week ago to the Supervisory Board of the Pension Agency.
Pension and social packages have increased starting from today. 114,000 people with disabilities and pensioners will receive the increased social package by 20 GEL [$6.18].
About 563.5 million GEL ($196.6 mln/€175.3 mln) has been accumulated in the pension fund since January 1, 2019, says the Georgian Pension Agency. 959,548 citizens and 61,165 organisations are registered in the pension saving system.The employed in Georgia transfer money to the country’s pension savings system which was launched on January 1, 2019.
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The National Bank of Georgia has become a governing member of the International Organisation of Pensions Supervisors (IOPS) starting December 2019, announced the National Bank of Georgia earlier today.
The European Georgia opposition party has urged the government to suspend mandatory pension contributions for eight months due to the situation created by Covid-19 virus.
Georgia intends to begin indexing pensions to inflation and economic growth, says Georgian Finance Minister Ivane Matchavariani earlier today.