Withdrawing funded pension savings when leaving Georgia (foreigners and emigrants): what to do under Georgian law

What to do

1. Status: the law applies only to citizens and to foreigners with a PERMANENT residence permit. A holder of a temporary residence permit is not a participant (Law of Georgia on Funded Pensions, Art. 1). For a temporary residence permit holder the issue is not a “payment on departure” but the return of amounts withheld: mistakenly or excessively paid contributions are refunded (Tax Code of Georgia, Art. 82). The fund may require the employer to correct an excessive contribution (Law on Funded Pensions, Art. 6). Contributions: the employee pays 2% of salary, the employer pays a further 2%, and the state adds its contribution (Law on Funded Pensions, Art. 3).
2. Participant: savings are available only from pensionable age or in the cases provided by law (Law on Funded Pensions, Art. 24). The exception is termination of citizenship and/or loss of a permanent residence permit, which allows the whole amount to be paid in a lump sum (Law on Funded Pensions, Art. 34¹). This applies only when loss of citizenship or residence permit is confirmed. Departure itself is not a ground (same, Art. 34¹).
3. Citizen: citizenship is lost upon acquiring a foreign one (Law of Georgia on Citizenship, Art. 21), unless consent to retain it was obtained in advance. In that case there is no right to the payment (Law on Citizenship, Art. 21¹).
4. Deadlines: the fund's decision is made no later than 30 calendar days from the application (Law on Funded Pensions, Art. 32). Payment is made no later than 30 calendar days after the decision (same, Art. 32). Payment is made only in GEL (Law on Funded Pensions, Art. 3).
5. Tax: payment on departure is not exempt from tax (Tax Code of Georgia, Art. 82). It is taxed at the general rate of 20% (Tax Code of Georgia, Art. 81) and withheld by the fund at source (Tax Code of Georgia, Art. 154).
6. A person who returns (citizenship or permanent residence) must notify their employers, and contributions resume (Law on Funded Pensions, Art. 34¹).
7. Where to apply: the Pension Fund of Georgia (a legal entity under public law) for the application, decision and payment; the Public Service Development Agency or the Public Service Hall for documents on citizenship and residence permits.
8. Evidence: passport; document on termination of Georgian citizenship or loss of a permanent residence permit; residence permit (type: temporary or permanent); extract from the individual pension account; GEL account details.
9. Pitfalls: assuming that leaving or deregistering is enough, when loss of Georgian citizenship or of a permanent residence permit is required; a person who relocated with a temporary residence permit waiting for a “payment on departure”, although they are not a participant at all and should demand a refund of amounts wrongly withheld; expecting payment without tax; dual citizenship with consent to retain Georgian citizenship, which gives no right to early payment.

Be sure to check

• who participates: citizens and foreigners with a permanent residence permit only; temporary residence permit holders are not participants, and amounts withheld are refundable
• grounds for early payment: termination of citizenship and/or loss of permanent residence permit, confirmed by documents; simply leaving is not a ground
• fund deadlines for the decision and the transfer; payment in GEL
• the payment is subject to 20% income tax, withheld by the fund