The FINANCIAL — According to the companies interviewed by The FINANCIAL, the majority of organizations do not offer their staff retirement plans. Moreover out of the seven asked insurance companies in Georgia only 3 of them – Aldagi BCI, Imedi L and GPI Holding – offer pension schemes.
At present, according to the data provided by insurance companies 6,039 people have their pension funds. From this the majority – 6,000 people – have them at Aldagi BCI, and Imedi L serves 39 consumers.
Usually pension funds provide people with steady income after they retire. In foreign countries, often retirement plans require both contribution of an employee and employer.
“Imedi L offers private pension insurance, composed according to the law of non state pension insurance and guaranteeing of Georgia. The object of pension insurance is the physical or juridical person which submits the payment in accordance to the pension scheme and regulated schedule.
The insurance payment period is determined according to the insured person’s preference: monthly, quarterly, twice a year, annually. The amount of insurance fee (minimum 10 GEL monthly) and period of insurance premium payment is also defined by the owner of the pension insurance.
Reimbursement of pension insurance starts with the pensioner’s age, which is 65 years for men and 60 years for women in Georgia, according to the law,” says Nino Khurodze, the Marketing Manager of Imedi L.
“By Georgian legislation pension instalments have to be paid in GEL only.
Aldagi BCI Private Pension (ABCI PF) hasn’t minimal and maximum initial payment. A PF member can make as big an instalment as he or she wants,” says Maiko Ivchenko, Head of the PR Division at Aldagi BCI.
“At Imedi L initial investment for the fund equals 10 GEL and we charge an 11% annual interest rate,” says Khurodze.
According to Khurodze, people save money in USD and EUR.
“For ABCI the PF period of interest rates charged is quarterly.
PF cannot give you a fixed interest rate, as by PF legislation there should be diversification in different kinds of equity, such as: time deposit, bonds, treasury, stocks, real estate and so on. Nobody can tell you what the performance will be like in the next year.
However, we can forecast this year’s interest rate, which will be from 12% to 15% annually,” says Ivchenko, Aldagi BCI.
Aldagi BCI offers three types of pension schemes for its customers:
Permanent Pension – pension benefits are paid after reaching the retirement age as long as the pension scheme member lives;
Fixed-Term Pension – pension benefits are paid for a certain period of time, usually no less than 5 years after reaching the retirement age – as specified by the contract. In case of death of the scheme member during the fixed pension payment period, his/her heirs become eligible to receive the remaining payments;
One-Time Disposable Pension – a certain percentage of the total accumulated pension savings payable on the date of retirement; the rest of the savings to be released either on the form of Permanent or Fixed-Term Pension payments.
Imedi L offers two types of packages for those who would like to create their pension funds:
Permanent pension – is given to the insured individual from the beginning of pension insurance reimbursement till his / her death;
Defined period pension – is given to the insured individual from the beginning of pension insurance reimbursement for the definite period of time (unless 5 years).
“The abovementioned option may be changed before the pension insurance is given out. The pension insurance reimbursement period starts with the pensioner’s age; insurance payment currency is determined according to the insured’s preference and may be GEL, USD or EUR,” says Khurodze, Imedi L.
The FINANCIAL interviewed the companies in Georgia about whether they have retirement policies.
“The company was offered a project of retirement saving by one of the leading insurance companies.
The project seemed to be appealing at first but later our employees did not wish to continue saving for retirements as it was not as practical and suited to the customers’ needs and wants as expected,” says Lika Bichnigauri, Human Resource Specialist at JSC Nikora.
“In Georgia pension funds are not well developed, the reason for this might still be high risk factors.
At the Radisson as the majority of our staff are between 22-26 years of age, they actually have no concern and demand for pension funds,” says Ekaterine Lomidze, HR of Radisson Blue Iveria.
“We have extensive insurance packages for our employees that cover most of their healthcare issues.
Natia Gorjoladze, head of Human Resource Management Department at UGT in an interview with The FINANCIAL said that the company does not have retirement saving for their staff.
At the same time our salaries are above average for the country and we believe that each employee can make own decision about savings,” says Levan Gogichadze, Head of the Marketing and PR department at Lukoil.
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