The ISET Policy Institute has been closely monitoring and assessing the progress of pension reform for years. Respectively, we have reviewed the proposed changes and identified substantial risks for the effective organizational structure of the pension fund and the welfare of over 1.5 million participating citizens. 

1. According to the proposed amendment, the Prime Minister will appoint the members of the Governance Board of the Pension Agency based on the proposal of the selection committee. This means less independence compared to the current system, under which the members of the Investment Board are selected by the Parliament of Georgia. We believe this is a step backwards particularly within the parliamentary republic system. The proposed change not only hampers the transparency of the Board members' selection process but also poses risks to the merit-based recruitment of the most competent and impartial candidates. 
2. The proposed amendments limit the engagement of external asset managers in the management of pension assets. As a result, pension fund participants will no longer be able to choose their preferred asset manager to oversee their savings for the best outcome, as was envisioned under the current legislation to be effective from January 1, 2025. Pension system participants will be negatively affected by such limitations on competition. In the medium term, it will adversely affect the development of the capital market in Georgia and, more importantly, it will limit the rights of the pension fund participants.
3. The proposed amendment raises the thresholds across different investment options and increases the freedom of the pension fund to utilize various financial instruments within the investment portfolios with less due diligence. Considering the prime minister's sole authority in appointing the Board members and the limited participation of external asset managers in the asset management process, granting more freedom in investment activities increases the potential risks of investing in government projects that could adversely affect pension system participants.