The FINANCIAL — The discussion of the Pension Reform was held at the Business Association of Georgia. The Deputy Minister of Economy and Sustainable Development Nino Javakhadze, the Deputy Finance Minister Nikoloz Gagua and the Vice-President of the National Bank of Georgia Archil Mestvirishvili met with the representatives of the Business Association of Georgia.
The process of working on the draft law on Pension Savings was carried out with the active involvement of the society. The economic team of the Government continues the public discussion process and this time they listened to the opinions of the member of the Business Associations and answered their questions.
As the Deputy Minister of Economy and Sustainable Development noted at the beginning of the meeting, the government is ready to cooperate with all the interested parties in order to perfect and advance the draft law. Nino Javakhadze emphasized the private sector’s role in the successful implementation of the reform process – together with the Government, the private sector contribute to the savings on the pension accounts and therefore, the Government and the private sector representatives share the same social responsibility, which will insure the dramatic improvement of the welfare of the pensioners in the future.
The meeting was held in a constructive manner and the government representatives made explanations about all the issues raised by the members of the Association, according to Ministry of Economy and Sustainable Development of Georgia.
Representatives of the business sector speak about the necessity of the reform. “This reform should be implemented by all meand:, – Soso Pkhakadze, the Vice-President of the Association noted and added, that this is a reform that first and foremost will be beneficial for the parties involved in the scheme. Besides, Soso Pkhakadze talked about the comments that the Association members have, in particular, the appointment of the members of the Investment Board and the disbursement of the Pension Fund. “The main part of the accumulated funds will be invested inside the country, but the investment policy will depend on the investment board. If in the country the assets are expended where investments can be made, some parts of the funds may be invested abroad,” – Soso Pkhakadze.
The TBC Bank Director General, Vakhtang Butskhrikidze also spoks about the necessity of the pension reform. He emphasized on the risks of investing in the pension funds – “First, the first five years of investments will start only in the direction with less risks, since the sixth year the citizens will be able to put more money into portfolios,” said Vakhtang Butskhrikidze. As for the question of raising the cost of business in the framework of pension reform, whether it is reflected on the salaries of the employee, Vakhtang Butskhrikidze responds that this is a social responsibility and he does not think 90-95% of companies will charge the employees.
According to Lasha Bzarashvili, a Chairman of the Financial Committee of Georgia Business Association, their advice was that funds should be directed towards the corporate finance, which will be an additional stimulus for the development of the capital market. At the same time, he should pay attention to the upper limit of investments beyond the country, in order not to withdraw funds from the accumulated funds in the pension fund and thus returning the money to the Georgian economy.
The issue of involving private insurance business in the pension reform process was also discussed at the meeting. The health director of GPI Holding, Besik Festunidze, said that if the reforms would be implemented in a planned manner and the state and private pension systems would work cooperatively, not in competition. In his opinion, private insurance companies will have an important role in the process of involvement of the self-employed in the reform.
According to Nino Javakhadze, approximately 500-600 thousand people will be involved in the pension system at the initial stage. As she noted, currently the pension system is underway. Work on “third pillar”, or a draft law on private pension system. In addition, as Nino Javakhadze noted, the insurance sector will have enough market to work under the pension reform.
Representatives of the economic team of the Government of Georgia promised the members of the Business Associations to take into account their suggestions. According to Nino Javakhadze, the government is ready to take note of the remarks made by the financial sector representatives regarding the investment of the business, including the pension fundd, in the draft law.
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