Azernews.Az

The US Trade and Development Agency (USTDA) has allocated a $600,000 grant to the Azerbaijan State Social Protection Fund (SSPF) to assist the government in developing pension programs for the country's citizens. A relevant agreement was signed by US Ambassador Anne Derse and SSPF Chairman Salim Muslimov on Monday.
The grant will be used to partially fund technical assistance to review individual pension account systems in various countries and design a national system for Azerbaijan.
"The application of the new system will ensure the payment of future generations' allowances and meet the needs of the destitute layers of the population," the envoy said.
Derse described the allocation as part of her country's commitment to supporting long-term and sustainable development in Azerbaijan and ensuring that the windfall of energy resources benefits all of the country's citizens.
Muslimov said in his remarks that the overall cost of the project was $1,111,400, of which $511,400 will be provided by SSPF.
Currently, SSPF is transitioning from a pay-as-you-go pension structure to individually-insured, state-funded pension accounts. Under the new system, also known as a Second Pillar system, pension payments are based on an individual's lifetime contributions rather than a percentage of total current contributions. SSPF also has plans to implement a Third Pillar system, which will allow individuals to contribute a portion of their wages to voluntary accounts in private pension funds, similar to individual retirement accounts in the U.S. In addition to making recommendations on these new pension systems, the USTDA-funded technical consultant will help develop a strategy for allocating a portion of the government's strategic financial resources to SSPF to supplement the new pension system.