Guidelines for Participation in the Accumulative Pension System

04/04/2024

The primary objective of the accumulative pension system is to enable residents of Georgia to build their own pension savings over the years, which they can access upon reaching retirement age.

The implementation of the pension scheme entails adjustments to the base amount used for calculating income tax. Consequently, this impacts the obligations of both employees and self-employed individuals, as well as the financial responsibilities of employers.

Hence, it becomes imperative for individuals and organizations, especially those responsible for salary computation and disbursement within a company, such as accountants, financiers, payroll managers, or HR personnel, to acquaint themselves with the new system.

In this article, we’ll delve into how these professionals should adjust their salary calculations in light of the pension reform.

Let’s begin by clarifying who qualifies to participate in the accumulative pension system.

The scheme applies to individuals who meet three requirements:

Differences exist among individuals who fulfill all three requirements. For some, participation is mandatory, while for others, it is voluntary. Additionally, some individuals are automatically enrolled, yet retain the option to opt out.

Participation in the scheme is mandatory for individuals who meet the following four requirements:

Participation in the scheme is voluntary for individuals who meet the following three requirements:

Individuals who meet the following four requirements automatically join the scheme but have the right to opt out*:

*It should be noted that if an employee exits the pension scheme, rejoining becomes voluntary for them. However, they will not have the option to exit the scheme a second time. In other words, after leaving and subsequently returning, participation will become mandatory for them as well.