The Government of Georgia is planning to radically change the governance system of the Pension Agency. The draft law, submitted to the Parliament by the Ministry of Economy, provides an increase in the limits of the funds within which the pension agency will be able to finance large projects.
Pension savings of Georgian citizens reach 4.9 billion GEL. Of this, 4.8 billion GEL is placed in the low-risk pension portfolio, and the rest in medium and high-risk portfolios.
With the legislative amendment projects submitted to the parliament, it will be possible to finance various projects from the low-risk investment portfolio, so it can participate in the funding of construction of a hydroelectric power plant, a port project or another investment project.
Currently, money from the low-risk investment portfolio can be invested only in financial assets, that is, government and corporate bonds, deposits, securities and corporate shares.
However, according to the new draft law, "other assets" will be added to this list, in which it will be possible to invest money in the amount of 15% of the volume of the mentioned investment portfolio, which as of today is about 720 million GEL. The permission to invest the mentioned amount in other assets should be given by the National Bank.
Currently, the law allows the possibility of financing projects in a similar way only in the case of medium-risk and high-risk portfolios. In particular, it can be 15% of the portfolio in the medium-risk portfolio, and 20% in the high-risk portfolio. In addition, the limits in medium and high-risk portfolios are increased, if the maximum share of other assets in the medium-risk portfolio was 15%, in the revised law it is 20%, and in the high-risk portfolio it is 25% instead of 20%.
