2.915 Georgians quit accumulative pension system
By Tea Mariamidze
Wednesday, April 24
The information was released by Levan Surguladze, Director at the Pension Agency on April 23.
“From 2,915 people who quit the accumulated pension reform 2,650 are from the public sector, which led to our surprise,” he said.
According to Surguladze, those 2,900 people amounted 0.4% of the total number of people involved in the system.
“The pension system reform is underway successfully and according to the current data, GEL 175 million has been accumulated in the pension system,” he said.
Roman Kakulia, the Chairman of the Parliament’s Sector Economy and Economic Policy Committee, also says the pension reform turned out to be successful.
He said the project is based on the best case scenario of the country's development.
“We must do everything for best case scenario for our country and its economy. Therefore, I called it the project of a joint risk. We all take risks together. At this stage, there was no other alternative. This risk is reasonable, but we are taking this risk together,” Kakulia said.
The Accumulative Pension reform took effect on January 1, 2019. The Parliament adopted it on July 21, 2018, which says that participation in the program is mandatory for legally employed people under 40, meaning they will be enrolled automatically but it is voluntary for people above 40 as well as for self-employed citizens.
Under the reform, all employed citizens of Georgia 40 and under transfer 2% of their untaxed monthly salaries to the state pension fund, with another 2% to be paid by employers and 2% by the state. This means that every month, 6% of employees' salaries go to the pension fund.
The pension program covers citizens of Georgia, foreign citizens permanently residing in Georgia, and those having no citizenship but who are employed or self-employed and receive an income.
If a self-employed person decides to accumulate the pension, they will have to put 4% of their monthly incomes into the pension fund.
After the money is accumulated in the pension budget, the funds will be used by the State for investments within the country. When people reach pension age, 65 for males and 60 for females, they will have an opportunity to use the money, together with their state pension of (currently) GEL 200 ($75).
The pension scheme can only be quit by the individuals who were already 40 or more by August 6, 2018. If a person turned 40 years old after this date, they cannot leave the pension scheme, according to the law.
The citizen who quit the accumulated pension scheme has the opportunity to return to the scheme anytime, but in such case, he/she will not have the right to leave the system.
After leaving the pension scheme, the accumulated amount of money will be returned to the state, employer and the employee.