The main directions of reforming the pension insurance system

BAKU/23.12.13/Turan : " Our main aim is to further promote sustainable development in the field of social protection of pensioners , the performance at the proper level objectives of the" State Program of pension- insurance system in the Republic of Azerbaijan in 2009-2015 ". This was stated by representatives of news agencies chairman

State Social Protection Fund (SSPF) head Elman Mehdiyev, bringing clarity to the question of what measures to reform the pension system are needed for the upcoming stage.

He said that today in Azerbaijan formed modern pension- insurance system, operating on common principles and covering the entire working population, where the size of pensions appointed tied to social security contributions, paid in and registered in the system personified account.

According to E. Mehdiyev , the main drawback is that the system of financing have not been cases of claims for contributions to the mandatory state social insurance , which is a factor that has a negative impact on strengthening the financial sustainability in the long term development and to increase the efficiency in this area. As a result, funds are formed by social insurance contributions are directed to the current payments are not based on insurance principles , which does not turn them into a reserve for future obligations under the pension benefits will be assigned on the basis of personalized accounting .

This limits the possibilities of active participation in the financial market of the pension system, which has free reserves over a period of time , as well as the possibility of the use of modern financial instruments. Because for the further strengthening of financial stability during long-term development of the pension system and to improve the efficiency in this area, primarily should consider division of state obligations of liabilities pension insurance system under the NDC system with distribution function, noted SSPF chairman.

In addition, one of the important conditions is to build mechanisms to regulate the difference between the social security regulations of employees , entrepreneurs and owners of land and rates of pension payments to these individuals . In other words , the construction of mechanisms to regulate indirect subsidies for business development without creating an additional financial burden on the functioning of the pension system based on insurance principles .

According to the fund manager operating structure norms of social insurance contributions , in particular the fact that the bulk of the burden of paying insurance premiums accounted for an employer contributes to reduced activity of the insured persons . Strengthening insurance principles in the pension system necessitates a gradual increase in responsibility of the insured person in the structure of the insurance standard.

As the upcoming reform measures outlined E. Mehdiyev necessity of forming mechanisms that make it possible for citizens to enjoy additional pension benefits besides the solidarity distribution system currently in force in our country, and based on the conditional accumulation. To this end, provides for the development of a funded component in state pensions , as well as the development of private pension institutions , he said. - 17D-