Azerbaijan: Technology to the aid of pensioners

woman atm
A woman withdraws her pension from an ATM in Baku, Azerbaijan. (Photo: UNDP Azerbaijan)

Ali Mammadov still remembers the long trek to the post office, the endless lines, and waiting days—sometimes even weeks—to receive his modest pension. Now, the Azerbaijani Government sends this 78-year-old retiree an SMS to his mobile phone, informing him that his pension is ready to be withdrawn. Mammadov then walks to a nearby ATM, inserts his card, and takes out his money.

Until recently, the country’s state pension system was out of date. Many retirees were required to fill out piles of paperwork, and some had to wait three to four months to receive their payment, if they received it at all. Pensions were low, about $10-$15 a month. Many vulnerable people in rural areas didn’t even know that Azerbaijan had a pension system, and thus refused to put money in the Government programme whose purpose was to provide them with an income once they retire.


  • The main achievements include higher productivity due to the development of ICT systems, improved client service, and improved satisfaction by pension fund employees.
  • Electronic payments are now made to 97.4 percent of pensioners.
  • Pension contributions have increased by 460 percent from 2003-2009.

UNDP was the first to support Azerbaijan’s State Social Protection Fund in advancing its reforms of the pension system. The fact that Azerbaijan’s pension system did not have an IT system prior to the reform meant that it was able to leapfrog to the newest solutions.

In 2003, UNDP agreed to finance the implementation of IT systems to improve the operation of the pension fund, with a view to bring about greater efficiency, transparency and accountability. From 2003 to 2009, pension contributions have increased by over 460 percent. State-of-the-art IT systems have been installed, dramatically reducing the amount of paper in the system. By the end of 2009, over 1.6 million workers, representing almost 90 percent of the target, had received modern social insurance cards.

Payments are now made to 97.4 percent of pensioners—electronically via the banking system. Pension disbursements are made on time and complaints have fallen dramatically. The basic pension in Azerbaijan is among the highest in the Commonwealth of Independent States.

Furthermore, Azerbaijan received international recognition for the use of ICT in its pension system in 2010. Regular training courses are being provided for pension fund staff to keep them up-to-date about the requirements of the installed hardware and software, as well as the new registration and data processing procedures. As a result, the level of ICT awareness and the quality of the social insurance services provided has risen dramatically.

Such innovations have made life easier for millions of pensioners. For example, when 58-year old Eleonora Khalilzade’s husband retired eight years ago, he had to submit reams of documents proving his employment history. She and her husband had to sift through salary records in old enterprises—a real challenge—she recalls.

However, when Eleonora retired recently, she only had to visit the website of the State Social Protection Fund. After entering her age and employment history in to an online calculator, she immediately saw how much her pension will be. “It is so easy to get that information now,” she declares.

Azerbaijan’s recent economic growth due to an oil and gas boom presents a tremendous opportunity to provide targeted care and support for the elderly, disabled, poor, and vulnerable. Reforming the pension system has proved to be a giant leap towards this goal.

Read the full story in our publication "Empowering Lives, Building Resilience"