New pension rules: Who will receive monthly supplements?

Amendments to the Law on Labor Pensions have been adopted by the Milli Majlis in the third reading. They will take effect after being approved by the President of Azerbaijan, with the effective date applying from the first day of this month. Under the rules, some citizens will receive monthly pension supplements.

MP Vugar Bayramov said this in a social media post, Operative Information Center-OMM reports.

He elaborated:

“Fixed monthly amounts will be added to the pension calculated on the basis of their social contributions, increasing the pension payment. Currently, when people in these categories retire, their pensions are determined according to their salaries rather than their pension capital. The new amendments strengthen the insurance mechanism, so fixed supplements will be added to the amount calculated on the basis of savings in their individual accounts when they retire. These categories include civil servants, military personnel of the Ministry of Defense and some other groups.

“To give a simple example, if a citizen in one of these categories has pension capital of 100,000 manats, 85% of that amount will be credited to their individual account, or 85,000 manats. To calculate the funded portion of the pension, that amount will be divided by 144 (85,000 manats/144 = 590.2 manats). The citizen’s funded pension amount will therefore be 590.2 manats. Because the citizen belongs to a designated special category, a fixed amount will be added to the funded pension. The result will be: monthly pension = 590.2 manats + fixed supplement.”

Bayramov added that the new rules would provide for the proactive assignment of pensions and pension supplements. This means citizens will not need to apply to any government agency; their pension amounts will be calculated and assigned electronically.

“The amount of the monthly pension supplement will be determined by a body designated by the relevant executive authority. In other words, when the amendments to the law are approved, a decree will also identify the body responsible for setting the monthly pension amount,” the MP said.