On August 4, 2003, another Presidential Decree "On measures for improving the state pension system in Azerbaijan Republic", the functions of the Ministry of Labor and Social Protection of Population of Azerbaijan Republic on providing, financing and control over payments of pensions and additional benefits were passed to the State Social Protection Fund.

Due to reforms related to the single insurance–pension system in the country through 2006, the servicemen of the Azerbaijan Armed Forces and persons with special ranks became covered by the mandatory social insurance.

[3] It has a board of seven directors, which include chairman, two deputies, the chairman of Nakhchivan Autonomous Republic of Azerbaijan, head of the central office of the fund, head of finance and budget department and the director of the department of the fund for work with the military personnel and persons with special ranks.

Main functions of the agency are working out proposals on state policies in the field of social insurance and labor pensions; preparation of draft budget of the fund and ensure control over the approved budget; ensuring collection of mandatory state social insurance contributions from all entities and individuals engaged in work activity; enforcing control over implementation of legislative requirements in the process of mandatory social insurance; issuing pensions from the fund's budget; issuing benefits for temporary disability, pregnancy and child delivery, childcare limited to periods stipulated in legislation; issuing full or partial payments for spa treatments of the insured; issuing funeral grants, etc.

As a result of implementation of the project people in all cities and the regions of Azerbaijan, even in remote areas, have been provided with plastic cards, and got opportunity to get their pensions and benefits via relevant ATMs.