Opposition urges gov’t to temporarily suspend mandatory pension contribution

Georgia launched a new pension system last year. Photo: Nino Alavidze/Agenda.ge. 

Agenda.ge, 16 Mar 2020 - 13:08, Tbilisi,Georgia

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. 

The opposition believes that the temporary suspension will help the state and the people to partly cope with financial challenges sparked by the respiratory infection.

With the temporary suspension the state will spare 133 million GEL which can be spent for healthcare. The entrepreneurs and employers will not have to pay 83 million GEL which will help them to maintain staff, while the employees will have 108 million GEL they will be able to use for covering their expenses,” European Georgia says. 

Georgia launched the new pension system at the beginning of last year.

Starting from January 1, 2019 the accumulated pension system was made mandatory for legally employed people under 40, meaning they are enrolled automatically. For the self-employed and those above the age of 40, enrolment in the programme is voluntary.

The system works on a 2+2+2 scheme. 

Each employee, employer and the government 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 make a deposit of 4% of their income, and the state matches another two per cent.