The right for retirement

Baku/24.02.21/Turan: After amending the law "On labor pensions" in 2018, only persons with 25 years of insurance experience and having a pension capital of 16,743 manats had the right to a labor pension.  The pension capital required for retirement pensions has increased. Currently, this amount is 28 thousand manat. According to some experts, in this case, given that part of the population works without a contract, after a while a large number of people may lose the right to labor pension.

What is the actual situation? Are amendments to the current law necessary in the opinion of deputies and experts?

Malahat Ibrahimgizi, a member of the Milli Majlis Committee on Labor and Social Policy, told Turan that allegations that a large number of people will lose their right to a labor pension in the future are just private opinions. She noted that the issue of pensions is currently being discussed. “You yourself saw how many informal workers were identified during the coronavirus. This happened all over the world, as well as in Azerbaijan. The coronavirus pandemic has led to economic hardship, employment problems, unemployment. Therefore, the states, on the one hand, are implementing an action plan related to the health of citizens, and on the other hand, to prevent poverty, support labor, employment and other areas. Our country has also taken very serious, prompt measures in these areas. Help has been given to many informal workers."

The deputy believes that the issue of labor pensions should be put on the agenda, changes to the law "On labor pensions" are needed. “I am sure that our state will never allow not only more than two million citizens to be deprived of their pension benefits, but also not a single citizen. But there is a need for serious changes related to the relevant articles of the Labor Code and the Law "On Labor Pensions". In this regard, a discussion of the Milli Mejlis Committee on Labor and Social Policy will take place. If there are any serious proposals on these issues, then, of course, we are ready to take them into account."

Currently half of the 1 million 692 thousand employed have a salary of 343 manats or less, the economist Gubad Ibadoglu told Radio Azadlig. “This means that in the future these people will have problems with receiving their pensions. According to the current legislation, retirement, with the exception of privileged groups, requires either 25 years of insurance experience or a minimum pension capital of 28,800 manats. Those who cannot afford any of this receive an old-age benefit for AZN 130 upon reaching the retirement age. ”

The expert noted that in Azerbaijan the system is built in such a way that an increase in the minimum pension ultimately leads to an increase in the minimum pension capital required for retirement. "At present, the minimum amount is 200 manats. The minimum pension capital is determined in this order. 12 years means 144 months. 144 months are multiplied by the amount of the minimum pension, that is, by 200 manats. That is 28,800 manats. If the minimum pension is 250 manats, then the required minimum capital will be 36,000, and if it is increased to 300 manat, this amount will be 43,200 manat. That is, with an increase in the minimum pension, it will become unattainable in the future."

Ibadoglu added that the number of hired workers is 35-40 percent of the employed population. “This is not a normal indicator. For example, in Russia, this figure is 68 percent, and in Belarus, it is slightly above 70 percent. This means that the unemployment rate in Azerbaijan is high. Data on how many unemployed people were registered in the country from April last year to the present day have not been disclosed. In the course of issuing a one-time aid, it turned out that 600 thousand received assistance, and 635 thousand were denied assistance. This means that the number of unemployed in the country has exceeded 1.2 million. If we take into account those who did not apply, this figure reaches 1 million 500 thousand. If you add to this the number of people I mentioned above and those who receive lower wages, this is 2.5 million. All these persons may be deprived of their pension in the future. "

The expert believes that in order to avoid this, first of all, non-state pension funds should be created. “If these funds are created, the population through them will form their insurance capital and will be able to retire on the terms of the funds. The second option is to increase employment, legalize hidden employment, as well as determine the minimum pension capital in an accessible form, increase the median wage.”- 0-