This analysis was first published by the Georgian Institute of Labour Studies (GILS), an initiative of the Public Health Institute of Georgia. Read the original on labour.edu.ge →
Income security in old age is a determinant of health in later life. This analysis reviews Georgia's funded pension system, introduced in 2019 — how it works, how much it has accumulated, and who it leaves out.
Seven years after Georgia introduced a funded pension scheme, its assets have passed GEL 8.2 billion and it has more than 1.7 million participants. But the scheme is built on formal wage employment, while more than a third of Georgian workers are informal and most current retirees depend entirely on a flat basic pension worth about a sixth of average earnings. This analysis examines what the 2019 reform has achieved, and the coverage and adequacy gaps that will shape retirement incomes for decades.
Key Findings
- By the end of 2025, the Pension Fund’s net assets exceeded GEL 8.2 billion, up GEL 2.2 billion in a year; investment profits reached a record GEL 796 million in 2025 (Parliament of Georgia, 2026).
- Registered participants exceeded 1.7 million at the end of 2025, with more than 125,000 joining during the year; contributions in 2025 totalled GEL 1.44 billion (Parliament of Georgia, 2026).
- Contributions total 6% of salary: 2% from the employer, 2% from the employee and 2% from the state through income tax (GBC, 2025).
- By 31 December 2025, 26,820 people had received payouts totalling GEL 124 million — an average of about GEL 4,600 each, a small sum relative to retirement needs (Pension Fund, via 1TV, 2026; GILS calculation).
- About 37% of employment is informal (Pignatti, 2026); informal and many self-employed workers do not contribute, so the scheme will not reach a large share of future retirees.
1. Introduction
Georgia’s pension system has two pillars. The basic state pension is a flat, tax-financed payment to all people of pension age, set at GEL 350–450 in 2025 and planned at GEL 390–555 in 2027 (see GILS analysis of the 2027 budget). Since 2019 a funded, contributory scheme has added individual savings accounts for employees. This analysis asks how the funded scheme is developing, and whether together the two pillars will provide adequate retirement incomes.
2. Findings
2.1 Rapid asset growth
Asset growth reflects both contributions and investment returns. Between August 2023 and April 2025, the annualised nominal return was 12.1% for the dynamic portfolio, 11.7% for the balanced and 11.2% for the conservative portfolio (Pension Agency, via 1TV, 2025). Amendments in force from 1 May 2025 introduced automated monitoring and sanctions for unpaid contributions (Parliament of Georgia, 2026).
| Indicator | Value |
|---|---|
| Net assets, end 2025 | > GEL 8.2 billion |
| Cumulative investment income | > GEL 2.2 billion |
| Registered participants, end 2025 | ≈1.71 million |
| Contributions in 2025 | GEL 1.44 billion |
| Cumulative payout recipients / amount | 26,820 / GEL 124 million |
| Average assets per participant | ≈GEL 4,800 (GILS calculation) |
Sources: Parliament of Georgia (2026); Pension Fund via 1TV and GBC (2026).
2.2 Small balances today
Because the scheme is young, balances are small. Average assets per participant are about GEL 4,800, and the average cumulative payout per beneficiary is about GEL 4,600 (GILS calculations). For people retiring in the 2020s, the funded scheme adds little to the basic pension.
2.3 The basic pension remains the foundation
In 2025, 888,500 people received a state pension, 70.4% of them women (Geostat, 2026). For the foreseeable future, the basic pension will be the main or only income for most of them.
3. Discussion
Argument 1: A scheme for formal employees in an informal labour market
The funded scheme is designed around wage employment. With around 37% of employment informal, high self-employment and low participation — especially among women — many working-age Georgians are building little or no funded pension. Women face a double gap: lower participation and earnings mean lower contributions, while their longer life expectancy means savings must stretch further.
Argument 2: Returns depend on markets
Recent returns have been strong, driven partly by global equities. Future returns will vary, and participants nearing retirement are exposed to market downturns. Clear default investment choices and communication are essential as the scheme matures.
Counter-argument: the reform is working as designed
Supporters note rapid growth in participants and assets, strong returns and improved compliance since 2025. All of this is true. The scheme was always intended to mature over decades. The issue is not that it has failed, but that it cannot by itself solve the adequacy problem for today’s retirees or for workers outside formal employment.
4. Limitations
Registered participants include people who may no longer be contributing, so active coverage is likely lower than 1.7 million. Data on contribution density, gender breakdown and coverage of the self-employed were not available for this analysis.
5. Conclusion
Georgia’s funded pension scheme is growing fast and has delivered strong returns. But it covers formal employees in a labour market where informality is widespread, and balances are still small. The basic pension will remain the backbone of retirement income for decades, and its indexation and adequacy deserve as much attention as the funded scheme’s growth.
GILS Recommendations
- Publish active contributor data by age, sex, sector and earnings, not only registered participants.
- Extend the scheme to the self-employed and informal workers through simplified voluntary contributions with state matching.
- Index the basic pension to wages as well as prices, so that it does not fall further behind earnings.
- Protect participants near retirement through life-cycle default investment options.
- Publish projected replacement rates for typical workers under different career scenarios.
GILS Position
Georgia has built a funded pension scheme quickly and well administered. The next challenge is coverage and adequacy: a retirement system that works for informal workers, women and those retiring before the scheme matures.
References
- Parliament of Georgia (2026). Health Care and Social Issues Committee reviewed the 2025 report of the Georgian Pension Fund. 22 June 2026. parliament.ge
- 1TV (2026). Pension Fund reports 26,820 beneficiaries, 124 million GEL in pensions disbursed as of December 31, 2025. 1tv.ge
- GBC (2025). Pension fund savings reach GEL 6.9 billion. gbc.ge
- 1TV (2025). Pension Agency reports disbursements to nearly 19,000 individuals; total pension assets reach GEL 6.7 billion. 1tv.ge
- 1TV (2025). Pension Agency’s assets total GEL 6.3 billion. 1tv.ge
- Geostat (2026). Indicators of Social Protection (2025). geostat.ge
- Pignatti, C. (2026). Recent Trends on Informal Employment in Georgia. ILO Working Paper 159. doi.org/10.54394/MOJI5185
Suggested citation: GILS Research Team (2026). Georgia’s Pension System Seven Years After the 2019 Reform. Editor: G. Pkhakadze. Georgian Institute of Labour Studies, Tbilisi. labour.edu.ge
GILS analyses are prepared with AI-assisted drafting. All figures and claims are verified against the cited primary sources and reviewed under the responsibility of the Editor.
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