Azerbaijan, Baku, Feb. 1 / Trend /
Member companies of the Caspian-European Integration Business Club (CEIBC) have met with Salim Muslimov, Chairman of the State Fund of Social Protection of the Republic of Azerbaijan, in Baku today.
Issues concerning pension provision, Azerbaijan's experience and development prospects in this sphere as well as issues that are of interest for CEIBC were discussed at the meeting.
Salim Muslimov spoke about the activity of the State Fund of Social Protection (SFSP) of the Republic of Azerbaijan.
He stressed the necessity of holding such meetings within the frames of CEIBC for establishing closer contact between government agencies and private sector.
During the meeting Salim Muslimov made a presentation of reforms implemented in the pension sphere of Azerbaijan during 2003-2011. He emphasized that SFSP's projects that are under implementation in the pension system of Azerbaijan together with UN development program were nominated as "the best and most efficient management" among all projects that are implemented by the UN.
Muslimov reminded that Azerbaijan started applying individual accounting system in 2003. Pilot project related to this sphere was completed in 2005. Starting from 2004 SFSP has begun applying newest technologies and now pensioners may get their pensions by means of plastic cards in any part of the world. 99.4 percent of pensioners of Azerbaijan use a system of plastic cards today.
The head of SFSP noted that insurance pension system has been separated from state aid system since January 1, 2006. Along with it, control over payment of social aid was passed to the Ministry of Labor and Social Protection of Population whereas SFSP was developed as a central body of executive power for collection of social insurance charges, maintenance of individual accounting, setting of pension size and control its payment. According to him, time showed that it had been the right step taken by Azerbaijani government.
Pensions were divided into basic and insurance constituents. Since then President of Azerbaijan Ilham Aliyev signed 7 documents on increase of basic component of labor pensions (depending on age) and 5 documents on indexation of insurance component of pensions. The 6th document on indexation (growth) of insurance component of labor pensions is expected to be signed on one of these days.
All categories of the population have been included into a single individual accounting in SFSP since January 1, 2007. Today, all pension payments are made on basis of the Law "about labor pensions". Social insurance issues are regulated by two Laws - about social insurance regulating issues of mandatory state insurance and about application of individual accounting of social insurance. In general, the three laws regulate the activity of the pension system of Azerbaijan, Muslimov said.
"Today there is no difference for the social insurance system where a man works. All social payments are made under single rules, single indexation is carried out", Muslimov said.
The problem of integration of workers who retired on basis of the old accounting system was solved during 2006-2011. A new accounting system was introduced, Muslimov noted.
Thus, profits of SFSP grew by 4 times starting from 2006. The number of socially insured people grew from 1 mln 300,000 up to 1 mln 967,000. Interest rate on social payments was reduced from 29 percent down to 25 percent.
According to him, an electronic system of information transmission has been created between the SFSP and the Ministry of Taxes.
He also touched projects that are implemented together with the World Bank. The main element is to create non state pension funds.
By mid of 2012 each citizen of Azerbaijan will be able to get online information about the size and the source that transferred a social payment to his/her account. It will be the key for qualitative pension provision to citizens in future.
SFSP plans to automate a process of pension assignment in Azerbaijan by the end of September of this year. Since an individual accounting has been carried out since 2006, the pension per each citizen will be assigned on basis of 170 manat per each service year. For this purpose, SFSP combined its base with a system of provision of IDs of the Ministry of Internal Affairs of Azerbaijan.
Muslimov also mentioned about a possibility of management of fund resources through cooperation with the mortgage fund.
Arjen Uyterlinde, Ambassador of Netherlands to Azerbaijan, spoke about the pension system applied in Netherlands.
Telman Aliyev, President and CEO of CEIBC, spoke about the activity of CEIBC during the meeting. He noted that if 50 percent of CEIBC consisted of companies representing non oil sector, now this figure reached 75 percent. According to him, the Club held meetings with heads of over 10 states and governments during 2011 and plans to continue this tradition in 2012. According to results of these meetings, CEIBC companies established joint ventures and develop business in these countries.
CEIBC member companies plan to meet with Mr. Ilham Aliyev President of Azerbaijan in 2012. Telman Aliyev also noted that CEIBC would celebrate its 10th jubilee this year.
CEIBC honorary membership certificates were given to Salim Muslimov, Arjen Uyterlinde, Ambassador of Netherlands to Azerbaijan, as well as certificates to new CEIBC member companies. Managers of companies and representatives of diplomatic agencies accredited in Azerbaijan took part in the meeting of CEIBC.