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The average life expectancy of the population is increasing, and pension system reforms are expected
The average life expectancy of the population is increasing, and pension system reforms are expected
Reforms aimed at strengthening the financial sustainability of the insurance-pension system and reinforcing insurance principles will continue.
This is reflected in the “2026–2029 Medium-Term Expenditure Framework” prepared by the Ministry of Finance.
It is noted that currently 69.7% of the country’s population is of working age (15–65 years), while 9.1% is aged 65 or older. Compared to global indicators, the current situation is considered satisfactory in terms of the financial sustainability of the state pension system. However, over the next few decades, an increase in the number and share of elderly people in the population may lead to a decline in the number of contributors to the mandatory state social insurance fund — the main financial source of the state pension system — and consequently, to an increase in its financial liabilities.
According to existing demographic trends, and based on the UN’s “World Population Prospects” report, the annual population growth rate, which was 0.6% in 2024, is expected to decline significantly by 2050.
At the same time, the number of working-age people (aged 15–64) is projected to peak in the second half of the 2030s and then begin to decrease, reaching 65.4% of the total population by 2050.
Conversely, the fastest growth will be observed in the population aged 65 and above. While in 2024 the share of people over 65 was 9.1%, it is expected to reach 18.1% by the end of 2050.
Additionally, with improvements in economic welfare, healthcare, and social protection, life expectancy is expected to increase. This, in turn, will lengthen the average pension payment period and raise the financial burden on the Fund.
In 2024, the average life expectancy in Azerbaijan was 74.6 years, and if the current trend continues, UN projections indicate it will reach 78.6 years by 2050. Against the backdrop of demographic aging, informal employment, structural shifts in the labour market, and global challenges, adapting the pension system to modern quantitative and qualitative needs remains a key priority.
To ensure sustainable, fair, and reliable social protection for pensioners, it is crucial to continue reforms aimed at strengthening the financial stability of the insurance-pension system and reinforcing insurance principles.
In this context, the investment of free funds of the State Social Protection Fund (SSPF) under the Ministry of Labour and Social Protection of the Population is an important tool for ensuring the long-term stability and future financial sustainability of the pension system.
Reforms aimed at strengthening the financial sustainability of the insurance-pension system and reinforcing insurance principles will continue.
This is reflected in the “2026–2029 Medium-Term Expenditure Framework” prepared by the Ministry of Finance.
It is noted that currently 69.7% of the country’s population is of working age (15–65 years), while 9.1% is aged 65 or older. Compared to global indicators, the current situation is considered satisfactory in terms of the financial sustainability of the state pension system. However, over the next few decades, an increase in the number and share of elderly people in the population may lead to a decline in the number of contributors to the mandatory state social insurance fund — the main financial source of the state pension system — and consequently, to an increase in its financial liabilities.
According to existing demographic trends, and based on the UN’s “World Population Prospects” report, the annual population growth rate, which was 0.6% in 2024, is expected to decline significantly by 2050.
At the same time, the number of working-age people (aged 15–64) is projected to peak in the second half of the 2030s and then begin to decrease, reaching 65.4% of the total population by 2050.
Conversely, the fastest growth will be observed in the population aged 65 and above. While in 2024 the share of people over 65 was 9.1%, it is expected to reach 18.1% by the end of 2050.
Additionally, with improvements in economic welfare, healthcare, and social protection, life expectancy is expected to increase. This, in turn, will lengthen the average pension payment period and raise the financial burden on the Fund.
In 2024, the average life expectancy in Azerbaijan was 74.6 years, and if the current trend continues, UN projections indicate it will reach 78.6 years by 2050. Against the backdrop of demographic aging, informal employment, structural shifts in the labour market, and global challenges, adapting the pension system to modern quantitative and qualitative needs remains a key priority.
To ensure sustainable, fair, and reliable social protection for pensioners, it is crucial to continue reforms aimed at strengthening the financial stability of the insurance-pension system and reinforcing insurance principles.
In this context, the investment of free funds of the State Social Protection Fund (SSPF) under the Ministry of Labour and Social Protection of the Population is an important tool for ensuring the long-term stability and future financial sustainability of the pension system.