'Funded' pension system to be introduced in Georgia
A ‘funded’ pension system is to be introduced in Georgia in the summer, 2018.
The bill on the new system was worked out by the Ministry of Finance and Economy and the National Bank.
After it becomes law, each person residing in Georgia will receive a bank account for monthly payments. Two percent of a fixed monthly salary will be paid by the employee, another two percent by an employer, and two by the government.
The new system is valid for Georgian citizens, foreigners permanently residing in the country and those employed in Georgia or doing business.
The system is obligatory for those under 40 and voluntary for the rest.
Those who are self-employed will have to pay four percent being both employer and employee, with another two percent coming from the government.
The new system is not a substitution for the present one, which provides a fixed pension of $70, but will serve as an addition.
Money in the pension accounts can be inherited.
The new system allows for later retirement, but after this employers and the government cease their 2 percent contribution. A person can only add his own two percent to his account.
The authors of the bill expect over USD 15.3 million to be put into the pension accounts within the first financial year.