By  Trend

There are no legal obstacles to the creation of private pension funds in Azerbaijan, Azerbaijani Minister of Labor and Social Protection of the Population Sahil Babayev told Trend on Feb. 18.

“Every citizen may apply for the creation of a private pension fund system,” he said.

“The commercial aspects of the system must be examined and determined for its operation, in particular, profitability, which is directly related to labor market and income,” Babayev said. “Today, this function is performed by life insurance companies that receive benefits for rendering this type of service. Life insurance services are the first step in creating private pension funds.”

“The activity of this model is connected with the development of the pension system and the labor market,” he said.

"The creation of private pension funds is the fourth degree in carrying out reforms of the insurance pension system,” the minister said. “The first degree is the basic or minimal, then the insurance part of pensions, then the accumulative one and then voluntary one. Today, its insurance part is widely used in Azerbaijan while the cumulative part is developing and this will take a little more time.”