Pension Agency holds reporting meeting as retirement savings investment rule changes

The Pension Agency of Georgia on Friday held a reporting meeting at the National Bank of Georgia following its announcement earlier this month about the changes in investment rules of the citizens’ savings. Until now, most of the savings had been placed in bank deposits and the Government securities.However, starting from September 6 funds belonging to citizens will be distributed in three types of portfolios. 

Employees, who do not choose the desired portfolio themselves, will have their savings automatically placed in a low, medium or high risk portfolio, based on their age, and will be able to make changes once a year. 

“The goal is to provide the maximum assets and income of the population. At any time a person will be able to make an investment decision, age will not matter. People will also be able to change their own decision at any time”, the Member of the Council of the National Bank of Georgia, Vice President Nikoloz Gagua claimed. 

Goga Melikidze, the Senior Investment Officer of the Pension Agency, said that the investments would be protected and the funds would be invested in major global stocks.

“This is the best practice. The high-risk portfolio means funds will not be invested in risky things, but in global stocks like Toyota, Samsung, Apple, Louis Vuitton. Claims that something will be lost are false,” Melikidze said.

The accumulated pension system came into play in Georgia starting from January 1, 2019, with the engagement mandatory for legally employed people under 40.

The system works on a 2+2+2 scheme, meaning each employee, employer and the Government making a contribution of 2 percent of the gross volume of the employee’s income to an individual retirement account. 

If self employees join the programme voluntarily, they make a deposit of 4 percent of their income and the Government adds two percent.