Azerbaijan may allow part of pension capital to be inherited

Azerbaijan is discussing the possibility of reforming the pension capital system, including the introduction of a mechanism for its partial inheritance.

The corresponding proposal was put forward by Milli Majlis deputy Vugar Bayramov.

According to him, in the event of a citizen's death, no less than 30 percent of the accumulated pension capital could be transferred to his heirs. The deputy believes that such a mechanism is capable of increasing citizens' interest in official employment and the payment of insurance contributions.

Bayramov noted that two main directions of possible changes are currently being considered. The first envisages giving citizens the opportunity to use part of their pension savings even before retirement. As possible purposes, he named the purchase of housing, the repayment of loans, and payment for education. According to him, similar mechanisms are already being applied, in particular, in Singapore and Kazakhstan.

The second direction concerns determining the further fate of pension savings after the death of their owner. Within the framework of this initiative, it is proposed to establish the possibility of transferring a certain part of the capital to heirs.

In addition, the deputy spoke in favor of introducing the concept of "average pension capital." According to his proposal, citizens could dispose of that part of their savings which exceeds the established average indicator even before reaching retirement age.

In Bayramov's opinion, expanding the possibilities for using pension capital will make the system more attractive for citizens and may stimulate them toward official employment, since the size of future savings is directly linked to the insurance contributions paid.

The deputy's proposals are so far at the discussion stage.