Proposed Amendments to the Law on Funded Pensions
The Parliament of Georgia adopted at first reading, under an expedited procedure, the draft law on amendments to the Law of Georgia on Funded Pensions, together with the related legislative package.
The main purpose of the amendments is to consolidate the rules governing pension contribution obligations and introduce new mechanisms for administrative liability in cases of non-compliance with those obligations.
The legislative package provides for the conditional release of employers from fines imposed by the Pension Fund after 1 May 2025.
To benefit from this relief, an employer must fully pay the relevant pension contributions and accrued late-payment amounts no later than 31 December 2026.
The amount of the fine imposed on an employer for failure to make a pension contribution will also change. Specifically, instead of the current fines of GEL 500 and GEL 1,000 for first and repeated violations, respectively, the fine will be set at GEL 300.
Under the amendments, if an employer pays the outstanding pension contribution within 10 days, the relevant fine will be cancelled, while enforcement of the fine will be suspended if it is appealed.
The legislative package provides for the establishment of an Independent Dispute Resolution Service within the Pension Fund, creating an additional mechanism for resolving disputes related to pension contributions.
It will also become possible to pay the pension contribution and accrued return in instalments over a period of up to 18 months.
Accordingly, subject to the applicable conditions, the transitional relief period provided for by the draft law would allow employers to obtain exemption from fines imposed after 1 May 2025.
As the amendments have so far been approved by Parliament only at first reading, their final content may be further clarified or amended during the subsequent stages of the legislative process.
