Average monthly pension increases by 6.4pct

By Sara Israfilbayova

The average monthly pension in Azerbaijan increased by 6.4 percent.

Minister of Labour and Social Protection of Population of Azerbaijan made the remarks at the board meeting dedicated to the results of the State Social Protection Fund's activity for the first half of 2017 and the upcoming tasks.

Muslimov said that from January 1, 2017, the insurance part of all types of pensions was increased by 12.4 percent.

In general, as of July 1, the average monthly pension increased by 6.4 percent, compared to the same period of 2016 and reached 201.7 manats ($118.5).

The number of pensioners equals to 1.325 million people and it is 13.5 percent of the total population of the country.

The Minister went on to say that incomes of the State Social Protection Fund in the first half of this year increased by about 260 million mantas ($152.8 million).

 "For 6 months of the current year, the fund's revenues increased by 259.4 million manats ($152.4 million) or 16.6 percent, as compared to the same period of last year and reached 1.9 billion manats ($1.1 billion). Revenues from compulsory social insurance increased by 105.3 million manats ($61.9 million) or 16.7 percent and reached 1 million manats ($587,600),” Muslimov noted.

The fund's expenditures amounted to 1.70 billion manats ($999 million), of which 1.67 billion manats ($981.4 million) or 98 percent were used for payments for the population.

He said that the number of people who have an individual account increased by 3.7 percent and reached 124.770 people, as of July 1 the total number of people who have an individual account is 3.5 million people, of which 59.5 percent are men and 40.5 percent-women.

Azerbaijani President Ilham Aliyev on May 2, 2017 approved amendments to the law "On Labour Pensions".

The amendments provide for the elimination of the concept of the basic part of the labour pension and the 12-year service required for the appointment of a pension, as well as the gradual increase in the retirement age for women and men up to 65 years.

The retirement age will increase every six months until 2021 for men, until 2027 for women. In view of the elimination of the concept of "basic part of the pension", the law introduces the concept of "minimum pension". The size of the minimum pension from January 1, 2017 is 110 manats ($64.4).

Another change is connected with the compulsory social insurance. So, now 90 percent of the deductions paid by employee on compulsory state social insurance will be reflected in his/her account.

Deductions are formed from two sources: the deductions made ​​by the employer in the amount of 22 percent of the salary fund of the enterprise, and the deductions worth 3 percent of the employee's wage. Formerly, only 50 percent of these deductions were reflected in employee’s account.

The law comes into force from July 1, 2017 and does not affect persons who retired before that date.

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