The FINANCIAL — The minimum pension increased to 100 GEL (60 USD) throughout Georgia from September 15. The pensions in Tbilisi increased by 6 USD while in the regions they increased by 12 USD.
The minimum pension limit in Georgia’s capital and regions is equal now. But it still can’t provide for even the basic physical survival of pensioners, experts believe.
The average basic state pension in Ukraine is 150 USD, in Russia – 300 USD, in the UK – 500 GBP.
The Government of Georgia announced that 35 million GEL had accumulated in the state budget. In addition, 13 million GEL will be allocated from the state budget to fund the pension service.
Should Georgians save their money in early retirement and then spend it on things like travel and vacations? Or is their pension enough for a minimum wage, health and age problems? How do Georgians prepare for their retirement?
According to data of the National Statistics Office of Georgia the minimum wage amounted to 149.6 GEL in December 2010. As for the average salary, it was 609.5 GEL (360 USD) in 2010.
“If the minimum wage is 150 GEL and a single pensioner receives only 100 GEL it means that help is needed. It means that he/she is surviving on only the most necessary foodstuffs such as bread, sugar, oil etc. A 100 GEL pension is very solid, but a pension cannot get too close to the minimum wage. The pension system is unable to fulfil its purpose, it can’t even provide for the physical survival of pensioners,” said Levan Gogoladze, an expert.
Along with rising pension, food prices and taxes have risen too. In Georgia food prices have risen by 220.4% from 2003 to 2010. At the same time, the price of gas has risen by 4 times, electricity tax – by 1.6 times.
There are some social allowances and pension funds which try to ensure the future of pensioners.
The pension fund’s asset value of Aldagi BCI has been increased and consisted of 5,815,021.84 GEL in 2011. Its value in 2010 was 4,949,031 GEL. 50% of the members of the pension fund of Aldagi BCI are 34 years old.
Pension insurance means financial support of those insured in their old age. The bases of financial support are those cash contributions which were made to the pension fund over the years. “The pension fund means taking care of your old age. A member of the pension fund transfers money to this fund and the fund is then obliged to pay an annual pension to the member when he reaches retiring age before his death. This is a scheme, through which at least a 10 GEL transfer can give a member quiet large profit,” said Ia Madzmarishvili, Internal Communication manager of Insurance Company Aldagi BCI.
The Aldgi BCI pension fund incorporates Bank of Georgia, the Embassy of France in Georgia and another 219 members.
The Ministry of Finance of Georgia plans to increase the amount of social assistance.
According to the project of the Ministry, by 2011 the aid will be 90-130 GEL for aged pensioners; disability pensioners will receive up to 70-120 GEL; disabled people and war veterans will receive 55-95 GEL; and the poor population who aren’t pensioners will receive 40 GEL.
A retirement plan is a financial arrangement designed to replace employment income upon retirement. These plans may be set up by employers, insurance companies, trade unions, the Government, or other institutions. Retirement plans in the U.S. are defined in tax terms by the IRS code and are regulated by the Department of Labour’s provisions under the Employee Retirement Income Security Act.
By 2020 for aged pensioners aid will reach 198-316 GEL; for disability pensioners it will be 103-316; Disabled people that participated in war – 213-331 GEL; the poor population who aren’t pensioners – 146 GEL.
The Ministry of Finance of Georgia estimates that those people who save 208 GEL per month will have 284 GEL as a pension bonus. If the saving is 121 GEL a pension bonus will be 190 GEL.
In 1995 the average pension in Georgia was 6 GEL. Then it became 14 GEL in 1998. In 2009 it became 80 GEL and later – 100 GEL.
The average pension in Armenia is 65 USD, in Azerbaijan – 125 USD and in Russia – 300 USD.
Europeans and Americans save enough during their careers and when they retire they spend their savings. They have 3 stages of retirement: up to age 75, when they travel a lot; from 75 to 85, when the activities slow down and then when the activity is too low because of age and health.
Discussion about this post