by Arthur Yernjakyan
Salaries of civil servants in Armenia will be increased 40% in average starting July 1 2014. So, they will avoid any difficulties with payments to the mandatory accumulative pension fund, Minister for Labor and Social Affairs Artyom Asatryan told reports, Thursday.
He said that the mandatory accumulative pension system was introduced in Armenia in Jan 1 2014 and is ready to serve the population. The Mandatory 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 minister called the reform fair, as the pension size will depend on the pension allocations of the citizens.
Introduction of the compulsory accumulative pension system in Armenia has sparked public outrage in Armenia. People are not ready to save, when they receive no sufficient funds to live on. Many private employers and companies also oppose the new system that forces them to undertake the pension burden of their employees.
Three opposition parties applied to the Constitutional Court for postponement of the new pension system's introduction, but the decision over the issue will be adopted in 6 months.
Pension assets of Armenia will be managed by two private European funds starting 2014. The assets will amount to $101-$108 million in the first year, and in 2015 they will grow to $100-$150 million. Two companies applied to the Finance Ministry for relevant licenses: Amundi (France) - a subsidiary of Societe Generale (20%) and Credit Agricole (80%) and C-Quadrat (Germany).