Presentation of Private Pension Scheme

25 Feb '10

On February 26 the BAG convened the presentation of pension reform attended by BAG members, director of Georgian Insurance Association Devi Khichinashvili and representatives of insurance companies. The presentation was made by the Association's Finance Committee Chairman, Vakhtang Butskhrikidze.

The reform foresees the development of private pension funds which implies creation of pension scheme based on individual contributions. According to the presentation, on the one hand the Government will encourage individual contributions in the form of tax exemptions and on the other hand state's duty on providing old age pension will reduce which in the long run will mitigate state budget burden.

Among the features of new pension system, accumulation and succession of individual contributions was emphasized; pension amount will be determined on individual basis, proportionate to the accumulated contributions.

The reform aims at creation of solid social guarantees, increased actual pension, investment possibility in the long run and expansion of the scope of service. System reformation covers several stages including: legislative amendments, drafting of pension fund regulatory standards, planning of financial indications and awareness campaign.