The establishment of non-governmental pension funds can be tangible in Azerbaijan after the development of fiscal markets in the country.
Samir Sharifov, the Azerbaijani Finance Minister, stated that at present the financial tools are not well developed. The establishment of private pension funds relies on the formation of investment portfolios and public confidence, Trend reports.
The Minister said that first of all the Government needs to create rules on placement of capital to pension funds to avoid risky investing operations such as similar to those in some CIS countries, including Kazakhstan and Russia.
Meanwhile, the chairman of the State Social Security Fund, Salim Muslimov, said that currently Kazakhstan has 16 private pension funds, but the pension system is a bit different in this country (it is fully based on the system of accumulation). Taking the risk, it is very important to form investment portfolios and financial institutions that will be used for placing the funds. In this way the capital can be saved from devaluation and the income gained would additionally finance future pensioners, Mr. Muslilov stressed.
The establishment of private pension funds in Azerbaijan is not in the too distant future.
A draft law on Private Pension Funds, developed by specialists of the State Fund was submitted to the Government in August 2005.