The pension system in Georgia is a complex mechanism that includes state and funded pensions. In this article we will look at the key aspects of pension provision in Georgia, analyze the legal regulations and offer solutions for different life situations.
1.Types of pensions in Georgia
There are several types of state benefits in Georgia, for example:
- State pension;
- Social package for people with disabilities;
- State compensation in connection with the expiration of length of service (for employees of certain categories - Ministry of Defense, Internal Affairs, etc.).
In addition to the state pension, Georgia has a funded pension system.
2.Who is entitled to a state pension in Georgia?
In order to receive a state pension in Georgia, the following conditions must be met:
- Age: women are entitled to pension from the age of 60, men - from the age of 65.
- Citizenship and residence: one of the listed statuses - citizen of Georgia; a foreign citizen who has been legally residing on the territory of Georgia for the last 10 years at the time of applying for a pension; a stateless person with a status in Georgia.
- Documents: application for pension with all necessary documents.
3.Entitlement of foreign citizens to state pension in Georgia
Foreign citizens who have been legally residing on the territory of Georgia for the last 10 years by the time of applying for a pension may receive a state pension provided that all conditions defined by the legislation of Georgia are met, including age and period of residence.
4.Amount of state pension and increased pensions for certain categories
In 2024, the amount of state pension in Georgia depends on the age of the pensioner:
- For pensioners under the age of 70, the pension is GEL 315, in highland settlements - GEL 378.
- For pensioners aged 70 years and older the pension is GEL 415, in highland settlements - GEL 498.
Pensions are annually indexed taking into account inflation and economic growth:
- For pensioners under the age of 70, the pension increases according to the average inflation rate for the last 12 months, but by at least GEL 20;
- For pensioners aged 70 and older - by 80% of the arithmetic average of the average inflation rate for the last 12 months and the real gross domestic product (GDP) growth rate for the last 6 quarters, but by at least GEL 25.
There are increased pensions for certain categories of pensioners:
- Former employees of law enforcement agencies from May 1, 2024 to January 1, 2025 receive a pension of GEL 1,000;
- Monthly compensation to the families of those killed in the line of duty from May 1, 2024 to January 1, 2025 - GEL 1200.
5.Procedure for receiving state pension in Georgia
In order to receive a pension it is necessary to submit an application for a pension, you will also need to have an identity document (passport/ID card).
- A stateless person with a status in Georgia must additionally submit the decision of the Agency for Development of Public Services on the determination of the stateless person's status in Georgia;
- Foreign citizens shall additionally submit a certificate confirming their legal residence on the territory of Georgia for the last 10 years at the time of application, which is issued by the State Services Development Agency.
The application and documents shall be submitted to the competent authority, which shall consider them not later than 10 days after submission. If a decision is made to grant a pension, it shall be granted from the first day of the month following the month of submission of the application, if the application is submitted in the month when the right to a pension arose, or at any time from the moment when the relevant grounds arose and it meets the conditions for receiving a pension.
6.Right to state pension in Georgia and pension in a foreign country
Georgian legislation allows receiving a pension simultaneously in Georgia and in a foreign country if the pensioner is entitled to it in both countries. Transfer of pensions from one country to another is not envisaged.
7.Grounds for suspension and termination of state pension
Payment of pension shall be suspended:
- in case the person has not received the pension for 6 consecutive months;
- if the person is in pre-trial detention;
- on other grounds arising from the legislation.
Payment of pension is terminated:
- upon personal application;
- during the period of public activity;
- in case of entry into legal force of a court sentence of conviction, under which the person was sentenced to imprisonment - from the day of suspension of the pension;
- in case of expulsion of a foreign citizen or stateless person from Georgia;
- in case of withdrawal of a person from Georgian citizenship or loss of Georgian citizenship by a person;
- in case of death of the pensioner;
- upon expiration of 3 years from the date of suspension of pension;
- on other grounds arising from the legislation.
8.Accumulative pension system
Georgia has a funded pension system:
Content: participation of employees and PEs, as well as the state and employers in making pension contributions. Contributions to the Pension Agency are 6% of the salary, of which 2% is paid by the employer, 2% is withheld from the employee's salary, 2% is paid by the state if the annual amount does not exceed GEL 24,000 (After exceeding GEL 24,000, up to and including GEL 60,000, the state pays 1%. After exceeding GEL 60,000 the state does not make pension contributions).
Who participates:
- Obligatory - Georgian citizens and persons with permanent residence before the retirement age during employment with a Georgian employer.
- Optional - individual entrepreneurs (An individual entrepreneur can join the funded pension system if he/she wishes, while his/her employees, if any, are obliged to participate).
Right of refusal: not provided for.
Exception: Payment of pension contributions is not obligatory for persons who reached the age of 60 (in case of men) or 55 (in case of women) before the entry into force of the Law of Georgia “On funded pension” (August 6, 2018).
Advantages: additional pension provision, possibility to accumulate significant funds during the period of labor activity.
How pension savings can be used: at one's discretion - to cover medical expenses, expenses related to disabilities and so on.
According to statistics provided on the official website of the Pension Agency, “The number of participants in the pension scheme is 1 million 519 thousand people. As of May 31, 2024, 10,356 people of various categories have used the funded pension and GEL 35.3 million has been paid to them as a pension.”. The value of pension assets amounts to GEL 5.1 billion. Most of the funds are placed in low-risk pension portfolio.
Thus, the pension system of Georgia includes both state and funded pensions, providing various opportunities for pension provision for citizens and permanent residents. These measures are aimed at ensuring a decent standard of living for the elderly and creating a sustainable social protection system.
Life situations
Situation 1: Nino K.
Situation: Nino K., a citizen of Georgia, lived in Ukraine for 20 years and in 2018, at the age of 58, returned to Georgia and got a job in a Georgian company. She does not intend to leave Georgia before retirement.
Decision: Upon reaching the age of 60, Nino K. will be entitled to a state pension in Georgia, as she is a citizen of Georgia. Since Nino was already over 55 in 2018, she is not required to participate in the funded system.
Situation 2: David H.
Situation: David H. is a citizen of Georgia and the Russian Federation. He came to Georgia at the age of 57 and lived in the country until he reached retirement age. Before that, he lived permanently abroad for 15 years. He has a pension in the Russian Federation. In Georgia he registered a PE. Did not make contributions to the Pension Fund. He is going to move to Spain.
Decision: David H. is entitled to a state pension in Georgia, as he is a citizen of Georgia. If David goes to Spain to live after receiving his pension in Georgia, he will be able to receive his pension in Georgia on the basis of a power of attorney, which will need to be issued every year. His pension in the Russian Federation will remain unchanged, as the pensions in the Russian Federation and Georgia are not interrelated.
Situation 3: Nadezhda P.
Situation: Nadezhda P., a German citizen, married a Georgian citizen and moved to Georgia in 2014 at the age of 42. Nadezhda permanently resides in Georgia, obtained a permanent residence permit (by her husband) and works for a Georgian company. The employer contributes for Nadezhda to the Pension Fund. Nadezhda is also registered as a PE and makes her own contributions to the Pension Fund as a PE.
Solution: Nadezhda P. will be entitled to a state pension in Georgia upon reaching the retirement age (60 years). For this purpose, it is necessary to submit to the Pension Agency a document confirming permanent residence in Georgia for the last 10 years. As for the funded pension, its amount will depend on the funds accumulated as a result of contributions.
Conclusion
The pension system of Georgia provides various pension opportunities for both citizens and permanent residents of the country. It is important to know your rights and pension conditions to ensure a decent future in your old age.
FQA (Frequently Asked Questions)
1.What types of pensions exist in Georgia?
There are several types of pensions in Georgia: state pension and funded pension.
2.What are the conditions for receiving a state pension in Georgia?
In order to receive a state pension, one must have reached the established retirement age (60 years for women and 65 years for men) and have any of the following statuses: a citizen of Georgia; a foreign citizen who has been legally residing on the territory of Georgia for the last 10 years at the time of applying for a pension; a stateless person with a status in Georgia.
3. Can foreign citizens receive pension in Georgia?
Yes, foreign citizens can receive state pension if all conditions defined by the Georgian legislation are met.
4.What is the amount of state pension in Georgia in 2024?
In 2024 the amount of state pension is GEL 315 for a pensioner under 70 years old and GEL 415 for a pensioner 70 years old and older. These amounts are higher in highland settlements.
5.How does the funded pension system work in Georgia?
All persons working under a labor contract with Georgian employers participate in the funded pension system. Contributions are 6% of the salary (2% is paid by the state if the annual amount does not exceed GEL 24,000, 2% is paid by the employer, and 2% is withheld from the employee's salary).
6.Can pension payments be suspended or terminated?
Yes, pension payments can be suspended or terminated in cases established by Georgian legislation.
7.Is it possible to receive pension simultaneously in Georgia and in another country?
Yes, Georgian legislation allows receiving pension simultaneously in Georgia and in another country if the pensioner is entitled to it in both countries. Transfer of pensions from one country to another is not envisaged.