BAKU, Azerbaijan, November 6. Proposed amendments to the Law "On Labor Pensions" were submitted for discussion in the third reading at a meeting of the Milli Majlis (Parliament) of Azerbaijan, Trend reports citing Azerbaijani Parliament.
The draft law allows unifying pensions, provides a method of indexation of pensions and creates a legal basis for the automatic increase of indexation.
Some 42 amendments are proposed to six articles of the law. One of the areas of amendments is related to the transition to the method of indexation of labor pensions. Application of the indexation method protects labor pensions from the impact of annual inflation. In Azerbaijan, 93 percent of the 1.15 million retirees currently receive pensions on a general insurance basis; their pensions are indexed at the beginning of each year according to the percentage of growth of the average monthly wage in the previous year and are thus protected from the negative effects of inflation.
However, the pensions of 85,000 pensioners are not indexed every year, but only if their former positions are increased, in which case their pensions are also increased according to the percentage of salary increase. This category includes deputies, judges, members of the Central Election Commission, ombudsman, prosecutor, prosecutor's office employees, military personnel, persons with special military ranks, and civil servants. For comparison, Parliament notes that over a 10-year period the pensions of those who receive pensions on general grounds increased by about 98 percent, while the pensions of those in the above category increased by only 70 percent.
The proposed changes to the law "On Labor Pensions" create the possibility of increasing the pension of all retirees by indexing it at the beginning of each year. Another change is related to addition of 200 manat ($117) amount to pensions and indexation and increase of these additions according to the decree of the Head of state last year. After the adoption of the proposed changes the amount of all types of labor pensions will be increased annually by indexation in a single order, and pensions will be increased more than under the previous method.
After discussion, the changes were put to a vote and adopted in the third reading.