Pension system transformation in the South Caucasus: A comparative analysis of Georgia, Armenia and Azerbaijan.

This study analyzes the pension systems of Georgia, Armenia, and Azerbaijan within the context of post-Soviet welfare transformation and financial sustainability. Following independence, all three countries inherited pay-as-you-go (PAYG) pension models but have since diverged: Georgia introduced a mandatory funded pension scheme in 2019, Armenia adopted a mixed PAYG and funded system in 2014, and Azerbaijan continues to rely mainly on the PAYG model enhanced by digital administration. Despite progress in expanding coverage and institutional development, challenges such as demographic aging, high informal employment, emigration, and limited public trust affect sustainability and fairness across the region. Projections indicate increasing fiscal pressures on pension systems by 2045, underscoring the need for reforms including broader coverage, investment diversification, and policies addressing demographic decline to ensure long-term financial viability.