'Azerbaijani legislation to provide decent life to pensioners'

Azerbaijan has developed a model of a long-term development of the pension-insurance system, the chairman of the State Fund of Social Protection of Azerbaijan Salim Muslimov said during a presentation on Friday at the 'Pension insurance system in Azerbaijan in 2020: a look into the future', formed on the results of actuarial studies. Projections were prepared by the American Overture Financial Ltd. company

The president of the company Mohammad Baki said the main purpose of the pension-insurance system is to provide a decent life for pensioners, at least at the level they enjoyed before retirement.

"Pensions must be at level of 60-80 per cent of the salary received by pensioners in order to achieve it" Mr Baki said

"However, there is a problem of informal employment in terms of the universality of this system, which does not allow the entire population to be covered," Mr Baki said.

The main directions of the pension system development, the risks and ways to prevent them were discussed at the event. The long-term development model of the pension-insurance system will be designed for the next 40 years.

Predictions of indicators which the fund will reach up to 2025 while maintaining the current level of macro-economic and demographic indicators, as well as the current parameters of the pension-insurance system will be published at the presentation. Preparatory work for the long-term strategy to 2050 will begin after the presentation.

Overture Financial Ltd has submitted the initial version of the model in the project and worth $1.1 million, funded by the U.S. Agency for Trade and Development (USTDA).

The loan agreement on the project was signed between the WB and the Azerbaijani government in November 2008. The total project cost is $54.6 million. The WB allocated $26.7 million through the International Development Association. (35 years with a grace period of 10 years and 0.75 per cent per annum).