YEREVAN. – Member of Orinats Yerkir Hovhanness Margaryan admitted Armenia has a number of legal problems with the introduction of new mandatory cumulative pension plan.

He is confident serious debates are necessary to discuss introduction of a new pension plan, since the citizens are forcedly deprived of their property right.

“In fact a person is forcedly deprived of the property right; salary is person’s property. We must make clear our approaches,” Margaryan said, adding that citizens need additional guarantees.

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 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 the some components of the Law on Funded Pensions pending the hearing of the petition submitted by the four non-ruling-coalition parliamentary forces—specifically, 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 deducing the mandatory pension payment from the salaries of their employees.

Photo by Arsen Sargsyan/NEWS.am