Pension Savings Accrued 1 Million GEL

Partially compulsory pension system has been launched in Georgia and a special pension agency was established on the basis of the same law. The accumulated pension system has been launched on January 1st, 2019. According to the pension agency, pension savings have already been accrued one million GEL. As stated by the fund, 200 million GEL is accumulated at this time.

There are 741 000 people and 50 000 companies involved in the pension accumulation, up to date 15,000 of these people have already left the scheme, which is 2% of the participants. Among them are MPs from opposition parties. Lela Keburia, Giga Bokeria, and Zurab Chiaberashvili have just recently left the compulsory accumulated pension system. MP Giga Bokeria believes, that under any government, it is better for people to dispose of their own money. Zurab Tchiaberashvili says that compulsory pension reform is a Georgian Dream trap and notes that unfortunately, 40-year-old citizens do not have the right to leave the system.

Involvement in the system is obligatory for citizens under the age of 40. For citizens older than 40 years participation is voluntary. The amount of contributions to the pension fund is distributed between the employer, the employee and the government. The pension system applies to people employed in the formal sector with the following principle - 2% + 2% + 2%.

Since April 1, 2019 individuals who became 40 years old after August 1, 2018, can leave the accumulated pension scheme. The number of such people is more than 200 thousand.

In addition, the pension agency states that the appeal of citizens is quite high in order to get consultations.

For the citizens who have left the pension scheme, however, they want to join, the law allows it. The employer must address the employer's accountant to join the pension scheme again. If the citizen wishes to re-enter the pension system before withdrawing from the scheme, he/she shall apply to the Agency for requesting the cancellation of the leave.

Director of the Pension Agency Levan Surguladze made a comment about agency’s expectations: “In two years we expect to accumulate 1.5 billion GEL in the pension system. He added that the largest investment capital base will be created in Georgia, which will facilitate the development of the capital market. Surguladze says the goal of the reform is to ensure financial support for citizens of retirement age, while the second goal is the development of the capital market.