Azerbaijan, Baku, Nov. 30 / Trend A. Akhundov /
Social insurance regulations will be optimized in preparation of a draft reforming the pension system in Azerbaijan, Deputy Chairman of the Azerbaijani State Social Protection Fund Elman Mehdiyev told Trend on Friday.
"An insurance pension system that meets international standards is successfully operating in Azerbaijan," he said. "Measures are operating within the 'State program on insurance pension system development in 2009-2015' to improve the system. However, it is important to determine the strategic goals for long-term development of the system and to continue bringing the indices of the system in line with modern requirements."
Azerbaijani President Ilham Aliyev signed an order on Thursday to prepare a draft concept reforming the pension system. The Cabinet of Ministers was instructed to submit the draft concept to the President within two months.
"Promotion of voluntary insurance will be taken into consideration when preparing the draft concept. Our aim is to strengthen the principles of social insurance in a private pension system and regulate additional rights and privileges. A number of indices will be optimized, including social insurance regulations and the transformation of the Azerbaijani State Social Protection Fund into an active participant of the financial market," he said.
At present, contributions for compulsory social insurance of employees come from two sources: employers transfer 22 percent from payroll funds and three percent is deducted from employee salaries.
The rate of deductions for social insurance of people engaged in entrepreneurial activity without establishing a legal entity has been reduced since 2008.
A single rate for landowners has been introduced. According to the current law on "Social Insurance", individual entrepreneurs engaged in trade, transport, construction pay 50 percent of the minimum wage monthly for compulsory social insurance, and in other areas - 20 percent. The minimum wage today is 85 manat.
The rate of six per cent of the minimum wage has been set for employees of family farms.
The official exchange rate is 0,7847 AZN/USD on Nov. 30.