Low-pension recipients may see larger increases under reform

“There were concerns that amendments to the Law on Labor Pensions would reduce pensions. That is not the case.”

Operative Information Center-OMM reports that Musa Guliyev, chair of the Milli Majlis Committee on Labor and Social Policy, made the remarks at the committee’s meeting today.

He said pension increases are based on insurance principles:

“About 90% of pensions are increased in line with growth in the average monthly salary. Insurance-based pensions are indexed and increased every year. The amendments will regulate the increase coefficients, allowing people receiving lower pensions to see larger increases.”

Pension indexation adjusts payments over time to reflect changes in wages or other economic indicators. In Azerbaijan, annual increases for insurance-based pensions are linked to wage growth, while the proposed changes are intended to make the distribution of increases more favorable to lower-pension recipients.