Challenges and Perspectives of New Pension Fund Reform in Georgia: Need or Obligation for Population?

Abstract

As Pension fund system is a cornerstone of countries economy, policymakers across the globe are still discussing about universal effective pension fund systems and struggling to implement and fit it to the country’s economy demography and financial system. From this point the main objective of this research topic was to test the effectiveness of new pension system reform in Georgia. It focuses on whether the reform will have positive effects on tackling poverty among elderly and bring to Georgian people real prosperity. The pension fund system represents the essential part of the economic policy. Moreover, it defines the social and political stability and future the development of the state economies. By other words, the simple objective of the pension system is to pay pensions to workers in their old ages and to protect elderly against the risk of poverty. As Pension fund system is a cornerstone of countries economy, policymakers across the globe are still discussing about universal effective pension fund systems and struggling to implement and fit it to the country’s economy demography and financial system. From this point the main objective of this research topic was to test the effectiveness of new pension system reform in Georgia. It focuses on whether the reform will have positive effects on tackling poverty among elderly and bring to Georgian people real prosperity. Despite of the central government announcement that the new system of accumulative pension was successfully adopted in the country, there are still hot debates and discussions in Georgian society including its fairness and effectiveness, which indicates the lack their awareness and involvement in this process.
Since workers aged over 40 can opt-out from the pension system, hundreds of thousands among population will remain without a decent pension in the future. This will cause massive poverty in old age. The main aim of this paper is to analyze exciting pension fund reform in order to give people a clear understanding of reform. In the presented research, there is discussed the introduction and development reform of the pension system in Georgia. International experience is also analyzed on the example of other countries, specifically Armenia, Azerbaijan Estonia and Latvia. It also discusses the characteristic aspects of the pension model introduced in Georgia. Finally, paper also include Social research specifically opinion of Georgian people about the new pension systems.