What will give private pension funds to citizens?

The Azerbaijani government intends to consider the establishment of private pension funds. This case is the medium term, because the country has a national social security fund, monopolized the segment. So far, all of the special laws and regulations passed by the parliament, the government and the head of state have been aimed at strengthening the position of the structure.

Responding to a question about the chances of Turan private financing expert Vugar Bayramov noted the need to change the regulations and their ideas were fitted under the Cabinet of Ministers of AR, otherwise the idea will be stillborn. By itself, the idea is not bad, and is widely used in developed countries, where citizens can transfer each month for 10, 30, 50 or more standard units of currency, depending on what type of retirement plan to receive at the time of well-deserved rest.

Private pension funds are also important because of alternative social security. That is, the citizen himself entitled to find partners in the face of the funds they entrust their future. There are, of course, the risks of unfair partnership between the payer assessments and funds, but this is the Civil and Criminal Code, and their counterpart in the field of administrative misconduct. Moreover, the state fund will not be a monopoly on pension contributions, will form the market, which will be attached to the financial regulator (maybe they will be the Ministry of Finance or the Central Bank) – the expert added.

According to him, the presence of the country’s only public pension fund alternative blocks the way citizens. There are no mandatory contributions to the state fund – it is the prerogative of employers who transfer to individual accounts of hired employees 25% of their earnings.

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