YEREVAN. – The pension reform in Armenia aims to legalize the people’s income yet the opposite occurred; the salaries remain in the shadow.   

Economist Gagik Makaryan, who is also Chairman of the Republican Union of Employers of Armenia, stated the aforesaid at a press conference on Thursday,

In his view, now numerous employees in Armenia are asking their employers not to formally register their salaries, so as not to have pension deductions from their wages. 

“The social situation in Armenia is such that the people are prepared to even forego accumulating work experience just to receive the salary in full,” Makaryan stated. 

That is why, he added, the funded pension system is premature for Armenia.  

The new funded pension plan formally came into force in Armenia on January 1, 2014 for those born in and after 1974. In line with this plan, 5 to 10 percent of the monthly salaries in Armenia will be deducted and be allocated to cumulative pension funds; the latter will be reimbursed as pensions once a person turns 63 years old. 

On April 2, however, the Constitutional Court of Armenia declared unconstitutional a whole series of articles in the new Law on Funded Pensions, and gave the parliament and the government until September 30 to amend the aforesaid law’s provisions that were deemed unconstitutional.        

Subsequently, the new government formed by newly appointed PM Hovik Abrahamyan announced its willingness to temporarily leave the aforesaid pension deductions on voluntary basis, and to prepare a new bill before the September 30 deadline.