SSPF Figures Not Corresponding to Realities

The State Social Protection Fund (SSPF) has estimated that by October 1, the average amount of labor pension for age was 195.6 manats or 43% of the average salary.

This was made possible due to two factors. In January-September revenues of the fund amounted to 2 billion 185.2 million AZN, more than half of which (1,304,700,000 or 5% over the same period last year) accounted for revenues from mandatory social insurance contributions. In addition, impact on the pension was made by the Head of State ordering the application of the coefficient of 1.4 to the insurance part of labor pensions, which came into force on 1 January this year.

Discrepancies are in the fact that during yesterday’s discussions in the Parliament on the SSPF budget for 2016 its head Elman Mehdiyev told reporters that the retirement age would be raised to 65 years (today it is at 63 years for men and 60 - for women). As the main reason he called lack of funding, which may face the Fund next year.

The economist Gubad Ibadoglu, commenting on the officer’s assumption, said there is no consistency between the work experience, professional activities of citizens and the retirement age in Azerbaijan. According to him, to social protection is adversely affected by two main factors. The first is the number of pensioners, which is increasing from year to year. Currently, their number has reached 1.3 million, out of which 61% receive an old-age pension. As to the second factor, despite the increase in the budget of SSPF, the income from the private sector is reduced, so the budget of SSPF in 2016 is forecast at 3 billion 78 million 600 thousand manats, of which 60% will be generated from budgetary sources. There is another problem - job cuts and decrease in wage funds in the places, the expert remarked.

"For the normal financing of the state pension system three employees should regularly carry out social payments, so that a pensioner could receive his pension, while in Azerbaijan this figure is more than two times less. So the retirement age could be increased to 65 years already next year," he stressed.

According to the annual UN report on human development, Azerbaijan is at the 125^th place among 187 countries for life expectancy (67 years). According to the State Statistics Committee, the average life expectancy in Azerbaijan is 73.8 years (men - 71.2, women - 76.5 years). --17D-