Azerbaijan will create private pension funds

BAKU/25.12.13/Turan : State Social Protection Fund ( SSPF) , with the assistance of the European Union will prepare a legal framework to regulate the activities of non-state pension funds.

As the chairman said SSPF Elman Mehdiyev innovations within twinning- project , approved by the European Commission , will facilitate the development of real storage element in the system of state pension provision and operation of private pension institutions.

" With the realization of this project will be prepared in Azerbaijan perfect legal framework to regulate the real storage element in the system of state pension provision and operation of private pension institutions. Development on this basis of voluntary social insurance along with mandatory state social insurance will provide additional opportunities to strengthen pensions citizens," said the head of the fund.

According to him, the funded part of pensions is the real expression of the accumulation of pension assets in the individual accounts of the insured persons , it may increase due to data management tools to reach retirement age face .

From this perspective , an important condition is the introduction of a funded component in the state pension system and organization of the private pension institutions. "In addition, the main subject of constant debate is the order of the accumulation of funds in individual accounts," he said.

On the other hand, in the use of low standards of social security are not appropriate indicators of pension payments , the allocation of a portion of the applicable standards of compulsory state social insurance in order to implement this component creates an additional budget deficit . Application is additional standard for this purpose is not in the interests of labor market participants .

E. Mehdiyev believes that without clarification of the issues mentioned , the construction of the mechanism of formation of individual savings accounts insured persons , management of real accumulation and direction of income from this system to a pension based on a personalized account, is very risky.

Currently, 25 of the 34 countries of the Organization for Economic Cooperation and Development acting jointly and distribution system in 11 countries - a mandatory funded system , in 9 countries - voluntarily - funded system . - 17D-

 

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