by Ashot Safaryan
he pension reform imposed on the people by the Armenian authorities is anti-constitutional, Zoya Tadevosyan, head of the Power of People initiative, member of the opposition Armenian National Congress, said at a press conference on Friday.
She said that the compulsory component in the pension reform runs counter to the Constitution. The citizens should administer their income themselves. "They say to the people: you need a well-to-do future. Why don't they ask what the people want? People know better what they want", said Tadevosyan.
Economist and former MP from the Prosperous Armenia Party Vardan Bostanjyan shares this viewpoint. According to Bostanjyan, if 80% of the citizens are against the pension reform, it speaks volumes. "This may be the best reform in the world, but the people don't want it. I have been against that reform since 2010. Everyone knows that", Bostanjyan said. He added that the citizens' funds may simply disappear.
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 new law sparked public outrage throughout the country. People are displeased not only with the mandatory component of the system but also with the absurd situation following the Constitutional Court's decision of January 24 that suspended some provisions of the Law on the Accumulative Pension until the Court considers its constitutionality on Mar 28 2014. 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. Nevertheless, the Finance Ministry of Armenia urges employers to calculate and make accumulative pension payments and employees to choose a pension fund and a manager for it.