Legislative framework for private pension funds in Azerbaijan ready in 2015
Baku, Azerbaijan, March 6
By Abbas Akhundov - Trend:
The legal framework for private pension funds in Azerbaijan will be prepared in 2015, Chairman of the State Social Protection Fund Elman Mehdiyev said at a meeting with member companies of the Caspian- European Club (CEIBC) on March 5.
"The legislative framework is being worked out as part of the twinning project with EU partners," he said. "Consultants from Lithuania and Germany are to help the Azerbaijani side."
"As for the work of non-state pension funds, two main issues are being discussed today," he said. "The first is whether the contributions to such funds must be mandatory or voluntary. The latest trends in world practice have proved that drawing funds of compulsory insurance creates certain risks and deficit in the funds allocated by the country for pensions.
"From this perspective, a decision was made to ensure the activity of private funds only on the basis of voluntary insurance. The second discussed issue was to organise the activity of private public funds, not surpassing the level of developing the country's securities market."
"The fund places the monies and directs the dividends to increase the funds on the individual accounts of insurers," he said. "The accumulated funds should be kept protected from the market impact and increased till the period when the policyholder retires. So there must be significant state supervision mechanisms. Once we find the answers to these questions, we can talk about the activity of private pension funds."
Translated by NH
Edited by SM