Open AccessASSESSING THE ADEQUACY OF PENSION SYSTEMS IN GEORGIA AND EUROPE
Author(s) -
Maka Ghaniashvili
Publication year - 2020
Publication title -
globalizac'ia da biznesi
Language(s) - English
Resource type - Journals
eISSN - 2449-2612
pISSN - 2449-2396
DOI - 10.35945/gb.2020.10.025
Subject(s) - pension , life expectancy , sustainability , workforce , order (exchange) , pension system , european union , modernization theory , economics , business , economic growth , economic policy , finance , population , sociology , ecology , demography , biology
For several decades, pension systems across the world have been undergoing reforms. The main reasons for this are demographic changes and increasing life expectancy. As life expectancy increases and the birth rate decreases, more people retire than are added to the workforce. To make these reforms more effective and ensure that they are based on the best benchmarks, the European Union (EU) has introduced the Open Method of Coordination (OMC) in the field of pensions. Pension system reform is on its way in Georgia since 2019, January. OMC evaluates pensions systems in terms of thethree main objectives: adequacy, sustainability, and modernization of pensions. Our methodology is based on multivariate statistical analysis, and employs synthetic indicators for adequacy objectives, in case of Georgia and 27 EU countries, in theyears 2010, 2015 and 2018. The article contributes to the existing literature on pension reforms through investigation of the convergence of EU27 and Georgia pension systems in terms of one of the OMC objectives, in order to evaluate the adequacyof the pension systems.