Political Economy of Old-Age Pension Reforms in Georgia (Report‪)‬

Introduction In Soviet Georgia the old-age pension system had been gradually developing as an integral part of the state welfare policy. In accordance with the ideological and political goals, the pension system was born entirely of the state and retirement payments that were financed on a pay-as-you-go (PAYG) basis through the transfer of funds from state-owned enterprises to the USSR State Insurance Company, Gosstrakh, which had a department in Georgia. The Soviet retirement pension system consisted of two parts, a public component and a voluntary component, which together provided relatively generous old-age pension benefits. (2) To receive a pension, workers were required to have participated in the labor force for a minimum of twenty years for women and twenty-five for men. (3) According to Castel and Fox, the pre-transition Soviet pension system was a complex and expensive mechanism, "combining elements of a Western European 1960s PAYG system with peculiar communist features." (4) In the late 1980s old-age pension coverage nearly reached a universal level, paying between 60 percent and 100 percent of the average wage. (5)