Friday, February 7 2014

 After the Constitutional Court of Armenia had taken a decision to suspend some provisions of the Armenian Law "On accumulative pensions", the Central Bank of Armenia (CBA) received numerous statements that demand ensuring the implementation of the specified decision and taking measures subsequent upon suspension of the contestable provisions, the press service of the CBA reports.     

To recall, the voluntary accumulative pension system was introduced in Armenia on Jan 1 2011. The system has become compulsory starting Jan 1 2014. According to the bill, the minimal pension in the country will be equal to the minimum wage, while the basic pension will total 150% of the minimum wage.  The compulsory accumulative pension system will apply to the citizens born after Jan 1 1974 (the citizens below 40). Starting Jan 1 2014, 5% of their salaries will be transferred to their personal accumulative accounts. The government will transfer a similar amount (but no more than 25,000 drams).

Meanwhile, the Constitutional Court of Armenia suspended some provisions of the above law on 24 January 2014 until it considers the constitutionality of the above eight articles on Mar 28 2014.  Decisions of the Constitutional Court cannot be disputed. The Court suspended Article 76 stipulating responsibility for refusing to make compulsory pension contributions or failing to do in time and Paragraph 3 of Article 86 saying that the employees covered by the system should choose a pension fund. The claim against eight articles of the law has been laid by four opposition parliamentary groups:  Armenian National Congress, ARFD, Heritage and Prosperous Armenia. 

The CBA says that by the 24 Jan 2014 procedural decision, the Constitutional Court of Armenia suspended the responsibility for non-fulfillment or delayed fulfillment of the compulsory pension payments. It also suspended the provisions demanding that the compulsory accumulative pension system participants should choose the pension fund and the fund manager. However, the CBA points out that the given procedural decision of the Constitutional Court does not exempt the accumulative component participants from the responsibility to make compulsory pension payments. In this context, the CBA says that the specified law's provisions regarding the accumulative component participants' obligation to make accumulative payments have not been suspended and it is their constitutionality that is still being disputed. 

"Consequently, the CBA advocates refraining from different kinds of interpretations of the Constitutional Court's procedural decision, because if the contestable provisions are declared complying with the Constitution of Armenia, the consequences for the compulsory accumulative component participants may be very tough and may lead to one-time payment of the accumulative part for the skipped period. We also state that the CBA's acts ensuring the application of the law provisions suspended do not hinder the fulfillment of the Constitutional Court's procedural decision. Consequently, at the moment the CBA sets no objective to take measures subsequent upon the suspension of the contestable provisions", the CBA says.