Urgency of Pension Reform in Georgia

Abstract

Georgia urgently needs pension reform. The disadvantage of the existing pension model was its pressure on the state budget. At the same time, the resent demographical changes, the increase in the life expectancy of pensioners, active aging in the demographic sector, the tendency of the labor force to decrease, the introduction of universal health insurance and other factors have had a significant impact on the country's economy and have highlighted new challenges that have put the sustainability of the state pension system at risk. The discussion of the need of the pension system reform in Georgia has become more and more active in recent years. It should be emphasized that within the expenditure allocation of the state budget, the largest proportion is attributed to social expenditures, with the state pension system claiming the most significant share. The pension scheme operating in Georgia does not guarantee a sufficient standard of living, it provides only a basic income, and that is why the government has prioritized the need of pension reform on the agenda so that the system responds more to the needs of aging populations and ensures their honorable old age as much as possible.