YEREVAN. – There has been no country in the world where the pension reforms passed smoothly.
Armenia President Serzh Sargsyan stated the aforesaid in response to the questions asked by the participants in the Yerkrapah Volunteers Union’s tenth congress on Saturday.
In his words, the reason is that the results of the reforms will show much later, whereas the people want their situation to improve now.
“We knowingly resorted to that step, for the sake of our children and grandchildren. No one can argue that reforms are not needed,” the President noted.
As per Sargsyan, it is the present-day Government of Armenia that decided to give a practical solution to this matter.
“I am completely in favor of these reforms. There may be poor formulations in the law, but I am confident that the meaning does not change,” he added.
In the President’s words, the pension funds will give a great momentum to all economic actors of Armenia. This money is needed for the country’s economy, so that they may be directed to the payment of pensions in the future.
“We are not foolish to waste political resource on a bad thing,” Serzh Sargsyan stated.
The new funded pension plan, which formally came into force in Armenia on January 1, 2014, is mandatory for those born in and after 1974 and voluntary for those born before 1974. In line with this plan, 5 to 10 percent of the monthly salaries in Armenia will be deducted and mandatorily be allocated to cumulative pension funds; the latter will be reimbursed as pensions once a person turns 63 years old.
On January 24, however, the Constitutional Court decided to suspend the execution of some components in the Law on Funded Pensions pending the hearing—on March 28—of the petition submitted by the four non-ruling-coalition parliamentary forces—the Armenian National Congress, Prosperous Armenia, ARF Dashnaktsutyun, and Heritage—, and into the constitutionality of the several articles of the law.
Notwithstanding this, some employers already are deducting the mandatory pension payment from the salaries of their employees.
