by Arthur Yernjakyan
The introduction of the compulsory accumulative pension system in Armenia has led to growth in shadow employment, Gagik Makaryan, Chairman of the Republican Union of Employers of Armenia, said at today's press conference.
He said that employees of not only private companies but also state organizations are protesting against the given system. The new law forces the employees to enter into a collision with their employers and conceal their real earnings, Makaryan said.
He added that the law implies rather tough sanctions, even arrest and confiscation of property, i.e. the sanctions are similar to those imposed in case of tax evasion.
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 law, 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). The introduction of the compulsory accumulative pension system has sparked mass protests.