Discussions continue regarding the re-adjustment of the retirement age for individuals working in certain professional fields. The focus is on how well the current pension system aligns with labor market realities and people's actual workload, as well as the potential impact of earlier retirement opportunities for some professions on the state budget and employment policy. Economists believe that both changes in the global labor market and socio-demographic indicators in Azerbaijan necessitate new approaches to the pension system.
Speaking to Modern.az on the matter, economist Rashad Hasanov stated that serious processes are currently underway worldwide to improve working conditions and enhance social protection mechanisms:
“This is an ongoing process. However, in the new labor market conditions shaped by artificial intelligence and new technologies, these issues become even more relevant. It is possible that a serious process of downsizing will begin in the labor market in the near and medium future. Artificial intelligence and new technologies will reduce the demand for labor. From this perspective, a review of age limits and insurance periods in the pension system will be inevitable.”
The economist noted that the existing working conditions, health levels, and average life expectancy indicators in Azerbaijan seriously dispute the current retirement age:
_n“In Azerbaijan, there is approximately a 9-year difference between the average life expectancy and the minimum retirement age. The global average varies between 14-15 years, and in some countries, this difference reaches 22 years. Usually, retirement age is compared with other countries, but average life expectancy indicators are not compared. However, as average life expectancy increases, the working-age period also extends.”
According to him, under current conditions, there is a serious need to reduce the retirement age in Azerbaijan and align it with international standards:
“It is important to further improve and expand the scope of differentiated retirement ages and conditions, taking into account the impact of certain working conditions on a person's health and future working capacity.”
R. Hasanov stated that although steps taken in this direction may create certain risks related to the financial sustainability of the State Pension Fund, there are significant opportunities to increase revenues:
“A significant part of the labor market in Azerbaijan is informal. Statistical comparisons show that it is possible to at least double the number of salaried employees in the country. If legalization is carried out in the labor market and real wages are reflected in employment contracts, the revenues of the State Pension Fund can be increased by 2-5 times.”
The economist added that changing the model of collecting mandatory state social insurance contributions and applying progressive interest rates according to income can also create additional financial sources:
“It is possible to increase the revenues of the State Pension Fund through such large-scale reforms. This can strengthen confidence in the pension system and create conditions for people to receive more accessible and secure pensions.”
