• Challenges of Georgia’s Pension System

    Author: Jaba Urotadze
    Institution: Iv. Javakhishvili Tbilisi State University, Georgia
    Year of publication: 2020
    Source: Show
    Pages: 171-185
    DOI Address:
    PDF: ppsy/49-3/ppsy2020311.pdf

    In 2018, a mandatory funded pension model (second pillar) was introduced in Georgia. At present, the Georgian pension system has three pillars, but the reform does not apply to current pensioners. If society does not trust all three pillars, the chances of reversing the pension reform will rise for two reasons. First, the replacement rate from the first pillar (state redistributive pension) is much lower than in any of the OECD member states. Second, for the majority of participants of the second pillar, pension payments will start in 20-25 years’ time. Such a long period creates uncertainty for many about whether long-term economic growth will be achieved, which in turn would make possible an adequate level of retirement income. This paper attempts to identify means of increasing replacement rates for the state redistributive pension and coverage of the voluntary funded third pillar. The research provides recommendations to enhance the Georgian pension system.

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