YEREVAN. – The new pension system in Armenia is a right step in the right direction.
Jean-Michel Happi, World Bank (WB) country manager for Armenia, stated the aforesaid at the Third Annual International Pension Conference, which is held Friday in Armenia’s capital city Yerevan.
In his words, these reforms will result in the increase of the Armenian citizens’ income and the pensioners’ pensions, the development of Armenia’s economic markets, and reduction of poverty in the country.
“The implementation of these reforms has become a major challenge in many countries. Positive results have been registered in Hungary, Poland, Slovakia, and Russia,” Happi added.
In turn, Teresa Daban Sanchez, International Monetary Fund (IMF) Resident Representative in Armenia, noted that the pension reforms in Armenia will result in major fiscal changes in the country.
“The pension reforms have a very clear direction, they pursue a clear objective; they will contribute to the reduction of the future burden on budgeting, [and] help reduce shadow economy. The matter of guarantees likewise is extremely important for the IMF,” Sanches stated.
As reported earlier, about three dozen members of the “I am against” civic initiative, which opposes the new pension law in Armenia, had crashed the conference hall, and violence was used against one activist.
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.
