Baku, September 19, 2025
Azerbaijan is preparing to introduce private pension funds that will operate alongside the state system, offering citizens the chance to build voluntary savings and receive additional income in retirement.
Musa Guliyev, chair of the Milli Majlis committee on labor and social policy, told İTV that the legislative framework is now being drafted by the Ministry of Labor and Social Protection and undergoing intergovernmental review. The bill is expected to be submitted to parliament either in the upcoming autumn or spring session.
Emil Aliyev, deputy head of a department at the ministry, said international experts are involved under an EU-funded framework agreement. A dedicated working group is refining the project.
Unlike the state pension system, private funds would grow savings through investment. The placement of funds will be subject to separate regulations, and deposit protection mechanisms will be established, modeled on practices in developed economies.
According to economist Khalid Kerimli, participants could choose between lump-sum withdrawals or phased payments upon retirement, with the additional right of inheritance applying to private schemes.
Analysts also anticipate the development of corporate pension programs, as companies competing for skilled workers may include private pension contributions in their benefits packages.
Supporters of the reform say the shift will allow retirees to move beyond reliance on state pensions, improving living standards through income generated by private retirement funds.
