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Waiting for pension changes

Meri Iremadze, 74, lives in Odilauri village in Imereti Region. According to paragraph 6 of Article 32 in the 2013 Georgia budget, all old-age pensioners like Iremadze should receive 150 lari   instead of 125 lari every month starting September 1, 2013.  Despite the rise by 25 laris, Iremadze needs to keep doing farm work.

She has six cows and makes cheese from their milk, which her son  Mamuka sells once a week in the Kutaisi market.

“The pension has increased, but also the prices of products have increased. She says “That’s why, despite my age, I have to work so hard.”  Meri is used to hard work.  She had a part-time job for 40 years in a tractor works factory with a 120-ruble salary.

The Georgian Dream party won the 2012 parliamentary elections. One of their promises to voters was that   any  pension  increase would match any increase in the consumer price index,  so pensioners would at least receive enough money to meet  their needs, as measured by a collection of prices called the minimum consumer basket.


According to the latest data from official webpage ( The National Statistics Office the cost to purchase the items and services in the minimum consumer basket is 154, 2 lari   higher than the new 150-lari pension.


The National Statistics Office calculates the minimum consumer basket using a list of 40 food products, utility bills and transportation costs that was approved by the Ministry of Labor, Health and Social Affairs on May, 8, 2003.  Till them, despite the election   promise of  Georgian Dream the items on the list haven’t changed..

About 70 %  of  the consumer basket costs are for provision and about  30 %for non-provision costs.


  “I have medical insurance with the government, but the insurance doesn´t  reimburse my medicine costs,” Iremadze says,   “Every month I have to pay more and more for my medicines and it takes all of my pension. For minimal food and utility bills, my family and I have to keep working hard.”  The  insurance  which  has pensioners nowadays  doesn’t pay medicine costs, that’s  why they  have to purchase  medicines herself.

 In January, 2013, the Ministry of health , Labor and Social Affairs published official  report  named Georgia Health System Performance Assessment .In this  report  pointed out  that “for population heavy burden is buying medicines, which  costs have been continuously  increasing  during the latest  10  years. Also according to this report, 60 % of medical services costs spent on medicines. Pharmaceuticals minimally funded by the state health insurance programs.”

In November of   2013, the government announced the creation of an accumulative pension system. Minister of Health, Labor and Social Issues Davit Sergeenko said that retirement savings should reflect the amount of money that a worker has paid into the pension system while he or she had a job, and that such a system would guarantee higher pensions.According to Financ e Minister Nodar Khaduri:  “For  social assistance for the elderly, it’s time a real pension system was created. Khaduri said that every person from 37years old will be able to accumulate money in his/her personal pension fund.

For   this time government  hasn’t proposed  any well-documented accumulation pension reform. Accumulative pension system   already  have the private insurance companies. Internal communication Manager of insurance company Aldagi Ia Medzmariashvili said :  „the main advantages of private pension scheme is  that cash resources are managed by pension funds, asset management companies are managed and staffed by highly qualifies personal committee, they  know how makes decision about monetary resources  for  the  various types of securities, such as  fixed-term deposits,assets and paid papers. Also customer can   decides herself and how often how much money to file on her retirement account. It is possible to miss some time, in this case Aldagi   doesn’t impose  any financial  obligations

According to the government proposal, no matter how little a worker manages to put in his personal pension fund, “(he or she) will receive a pension from the state of not less than the minimum wage.”  In Georgia concept   minimum wage is the   social-economic standards and governed by the applicable law  “about the amount of minimum wage.“ One ordinance by former president Eduard Shevardnadze ( 1999 year) was defined the minimum wage in the private sector is 20 lari per month,according to ordinance of  president  Mikheil Saakashvili  ( 2006 year)  minimum wage  in the public  sector  defined as 115 lari  per month.  Since then legislation standard   about minimum wage hasn’t  changed.


 This new proposal isn’t acceptable for   Iremadze. “For people who are elderly now, it doesn’t change anything,” she says.  “I want to a pension supplement added for my 40 years working experience. Prices get higher every week. We can’t survive on