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ICC Names 13 Reasons not to Adopt Pension System Reformation Bill

International Chamber of Commerce (ICC) asserts that the pension system reformation project introduced by the Government does not fit for implementation because of 13 reasons:

1. The current project cannot ensure the so-called respectful pension for 70% of employees despite making deposits for 30 years;

2. The current project cannot create an alternative to the existing social pension system.

3. The pension reform cannot reach self-employed and unemployed citizens and this will become a serious ground for discontents.

4. Only 10% of economically active citizens will see hypothetical benefits from the introduced scheme.

5. The reform will enhance inequality in Georgia.

6. Instead of cutting state budget transfers under the pension reform, on the contrary, these expenditures may increase after the reform implementation.

7. The introduced project will provoke unofficial labor contracts and boost shadow economy. As a result, the state budget may lose serious revenues.

8. Business doing process will be complicated.

9. Government will try to employ the pensions fund resources to compensate the increased expenditures.

10. Taking into account high risky environment for investments in Georgia, the it is not expedient to invest pension fund finances in Georgia.

11. Political risks.

12. Unrealistic expectations may fail the reform and the public trust to the Authorities may plunge.

13. If the current project is adopted, its abolition or revision will be impossible, in practice. It does not leave space for flexibility and is of irreversible character.