Until July 1, 2017, men in Azerbaijan retired on an employment pension at the age of 63, and women at the age of 60. From that time, a gradual increase in the age limit began; on July 1, 2021, the retirement age for men reached 65, and from July 1 of this year, the retirement age for women also becomes 65, with the increase process completing on July 1, 2027.
At the beginning of 2017, when the increase in retirement age started, there were 1,315.2 thousand pensioners in the country. At the beginning of 2026, 1,098.9 thousand pensioners are recorded.
The minimum pension amount is 320 manats.
According to the law, in order to be granted a pension, either 25 years of insurance experience or a minimum pension capital is required. The minimum pension capital is calculated by multiplying the minimum pension indicator (320) by the expected number of pension payment months (12 years × 12 months = 144). Currently, it is 46,080 manats.
From January 1, 2006, to July 1, 2018, a pension is granted to a person who has accumulated pension capital of any amount and has at least one year of insurance experience; otherwise, a person who reaches the retirement age is given a monthly allowance of 220 manats due to age.
What innovations are currently needed in Azerbaijan's pension system?
Regarding the topic, Medianews.az quoted economist Natig Jafarli as saying that Azerbaijan’s pension system has been changed several times and its current state is far from satisfactory: "Perhaps there is even a need for entirely new legislative initiatives. There are several problematic issues that must be resolved. The retirement age is always discussed in our country, but actually, it is not such an important issue, or rather, it is a secondary issue. The main issue is the very low amount of pensions. We have to solve this issue. There are different ways to do so.
First, citizens should be given, to some extent, access opportunities to their pension capital. At least those who accumulate the minimum amount should be given this chance so they can solve certain problems with that money. For example, some people have 100,000; 150,000; or even 200,000 manats in their pension capital, but on the other hand, they have credit debts to the bank. If this person is elderly, say over 50-60 years old, why shouldn’t they be allowed to pay off their debt? Or, a pensioner's grandchild has been admitted to a university but cannot study because there is no money to pay the tuition fees. Why shouldn't it be possible to pay the tuition fees from the pension capital?
Here, there is a serious need for changes concerning the part of pension capital related to issues like this. Citizens' access to their pension capital should somehow be ensured. We must find an official answer to the question: If the accumulated funds are ours, why can we not use them? After all, we pay this as if it were a tax. Payment to the State Social Protection Fund is mandatory; if it is mandatory, then it is a tax.
I believe these problems must definitely be reflected in new legislative initiatives alongside the age issue."
Nailə Qasımova,
Medianews.az