What a private pension scheme is and who takes part in it
Non-state pension insurance and provision in Georgia operates separately from the state pension system and is built around a pension scheme — a system of relationships between physical and legal persons, established by a founder. The scheme rests on a contract: under it, the founder assumes, in accordance with the procedure set by the pension scheme, the obligation of non-state pension provision for the participant, while the contributor assumes the obligation to pay pension contributions. The participant is the person for whose benefit contributions are paid and the pension is granted. Three roles therefore stand out in every scheme: the founder, who establishes the scheme and undertakes the payment of pensions; the contributor, who pays pension contributions; and the participant, in whose interest the whole arrangement exists.
It is precisely in order to protect participants’ interests that the Law of Georgia on Non-State Pension Insurance and Provision regulates in detail the establishment of a scheme, its types, the adoption and registration of its rules, and the termination of the scheme. If your organisation is considering establishing a pension scheme, or you are already a participant in one, it is important to understand that every stage of this process — from the form of the contract to registration with the National Bank of Georgia — follows a procedure prescribed by law, and disregard of these rules may lead to serious legal consequences, up to the cancellation of the scheme’s registration.