On March 16, 2026, held a permanent scientific seminar at the Institute of Economics of the Ministry of Science and Education. At the seminar, chaired by the Scientific Secretary, Doctor of Economic Sciences Leyli Allahverdiyeva, the leading scientific worker of the Inclusive Social Development Department of the Institute of Economics of the Ministry of Science and Education, Doctor of Economic Sciences Vafa Hashimova made a report on "Liberalization of the Pension System".
The researcher examined several social, demographic, and economic factors that influence the formation and sustainability of the pension system. For example, the pension replacement rate, it means, the ratio of the average monthly pension amount to the average monthly wage, is used to determine the difference in income between pensioners and workers. According to Convention No. 128 of the International Labor Organization (ILO), the ratio of the average monthly pension to the average monthly wage should not be less than 45%. According to the results, the pension replacement rate in Azerbaijan increased from 30.3% in 2010 to 43.7% in 2024. One of the indicators measuring the social status of pensioners is the ratio of the minimum pension amount to the subsistence minimum for pensioners. Since 2018, the minimum pension amount in Azerbaijan has exceeded the subsistence minimum, ensuring the adequacy of pension provision. By the beginning of 2025, the ratio of the minimum pension amount to the subsistence minimum was approximately 137.9 percent, which indicates the effectiveness of social protection policy.
The speaker noted that one of the most important indicators of the sustainability of the pension system is the ratio of state pension expenditures to GDP. In modern social security models, the financial sustainability and economic adequacy of pension systems act as one of the main goals.
In modern social security models, the financial sustainability and economic adequacy of pension systems act as one of the main goals. In this context, the ratio of pension expenditures to GDP is an important macroeconomic indicator reflecting both the total economic burden of expenditures and the level of sustainability of the system. According to the indicators of 2024, this ratio in Azerbaijan was 5.2%.
At the end, held interesting discussions on the topic and answered questions (economics.org.az).
