Azerbaijan considers pension reform to strengthen social security reserves

The Milli Məclis is considering legislative changes regarding labor pensions in Azerbaijan. The proposed amendment seeks to adjust the amount of mandatory state social insurance contributions directed to the individual personal account's insurance component. Currently, 90 percent of these contributions are allocated to this sub-account; the new proposal suggests reducing this to 85 percent.

The primary objective of this reform is to strengthen the social security reserve and enhance the sustainability of the social security system for vulnerable groups. Increasing these reserves is intended to facilitate the annual indexation of pensions, including minimum pensions, and to increase benefits related to temporary loss of work capacity, pregnancy, childbirth, child birth, and funeral expenses.

In recent years, five social reform packages have allocated an additional 8 billion manat, resulting in a threefold increase in minimum and average monthly pensions and a fivefold increase in various allowances and scholarships.