Amount of pensions increases in Azerbaijan

  06 February 2020    Read: 893
  Amount of pensions increases in Azerbaijan

Azerbaijani President Ilham Aliyev’s order "On indexation of retirement pensions", signed on February 6, 2020, is another important step to strengthen social protection of pensioners, reports citing Trend. 

As of January 1, 2020, the insurance part of all types of labor pensions increased by 16.6 percent in accordance with the annual growth rate of average monthly salary set by the State Statistics Committee for 2019.

This demonstrates the continuation of successful social reforms in 2020, which ensured the adoption of revolutionary measures in the field of social payments last year upon the president’s decision and which led to an increase in the well-being of 4.2 million citizens.

Pensions will be indexed in accordance with the average monthly salary growth rate for 2019 and will cover all pensioners receiving pensions upon the insurance principle (93 percent of pensioners or about 1.1 million people).

The additional funds in the amount of approximately 560 million manat ($329 million) annually or 47 million manat ($27 million) per month are planned to be spent to carry out indexation.

The funds will be financed through the income of the State Social Protection Fund under the Ministry of Labor and Social Protection of Population. After this increase, the amount of the average monthly pension will increase from 262 manat ($154) to 300 manat ($176).

The amount of pensions has increased since January 1, 2020 and the difference in amount for January will be paid along with the pension for February. For example, if the pension is 400 manat ($235), then since January 1, this amount has increased by 16.6 percent, i.e. by 66.4 manat ($39) and reaches 466.4 manat ($274). Some 66.4 manat ($39) for January will be paid in February. That is, a pensioner who had a pension worth 400 manat ($235) will receive 532.8 manat ($313), which is the sum of 466.4 manat and 66.4 manat ($274+$39) in February.

Moreover, the amount of pension capital set in the insurance part of individual accounts in the personal accounting system in accordance with the annual level of the consumer price index has increased by 2.6 percent since January 1, 2020.

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