MINISTRY OF ECONOMY
AND SUSTAINABLE DEVELOPMENT
OF GEORGIA

Parliament of Georgia adopted the draft Law of Georgia on Accumulative Pension, including the relevant legislative changes, on July 21 at the third hearing. The package of these laws is a part of pension reform, the main goal of which is to improve the existing social system in Georgia.

Deputy Minister of Economy and Sustainable Development Ekaterine Mikabadze presented the Draft Law to the members of Parliament. According to the Deputy Minister, the Accumulative Pension system will enable the citizens to create savings that will be proportional to the salary generated by the employer over the years to receive a higher replacement coefficient.

Ekaterine Mikabadze stated that the accumulative Pension is an important step forward in response to the most important challenges that provide a decent pension. As Mikabadze noted, in the longer term, the Accumulative Pension together with the social pensions will significantly increase the pension coefficient up to 50 percent.

“Accumulated Pension scheme is the answer to the social challenges. With this reform, the state will significantly help the Georgian population to make savings and share social responsibility with them. We create a real basis to deal with the problems that exist today in terms of justice and effectiveness. This is the main purpose of the reform. However, it should also be noted that the reform has a positive economic impact. As a result, we will have increased resources in the economy, which is a step forward for the development of the capital market. This is an alternate, long-term resource that enables businesses to implement new productive investments, creating new jobs and providing economic growth,” – the Deputy Minister of Economy and Sustainable Development stated.

The Accumulative Pension will be a mechanism for complementing the revenue column that will answer the most important challenge in the long run, providing a decent pension. The existing pension system has significant drawbacks in terms of fairness, efficiency and fiscal sustainability.