Azerbaijan may adopt law on private pension funds in 2026

A draft law on establishing private pension funds is expected to be discussed and adopted in Azerbaijan next year, a senior lawmaker said.

Musa Guliyev, chair of the parliamentary committee on labour and social policy, said insurance companies would act as private pension funds, allowing citizens to voluntarily build their pension capital. Under agreements with insurers, this capital could be invested in business projects, withdrawn in full or in parts upon retirement, or passed on to heirs.

Guliyev noted that demographic trends in Azerbaijan are moving in a negative direction, with declining birth rates, longer life expectancy and a growing elderly population. He said this would negatively affect the labour market and pension system over the next 15 years.

Azerbaijan’s current pension system, introduced in 2006, is based on social insurance contributions. To qualify for a pension, citizens must meet three conditions: reaching the retirement age of 65, having at least 25 years of work experience, or sufficient pension capital.

N.Tebrizli