Nalbandian: Racism and racial discrimination, xenophobia and intolerance grossly violate human dignity and give rise to tensions within and between societies. That is why the fight against them became one of the main priorities of our chairmanship.
by Elita Babayan
The silence of the pension funds empowered to manage the pension assets runs counter to the future pensioners' interests, Aram Kayfajyan, CEO at Armenbrok Investment Company, has told ArmInfo when commenting on the fact that most citizens are unaware of the important components of the accumulative pension system.
"We are seriously concerned with the silence of the pension funds. Many expect them to be active, to appear in the mass media and to provide detailed information of their strategic plans. This behavior of the funds can be explained either by their indifference to the small Armenian market or by the lack of skilled personnel in the country. I think the presence of foreign specialists, i.e. analysts and senior managers, would enhance public confidence in these funds", says Kayfajyan.
According to Kayfajyan, both funds are nevertheless the leading players in the European market of trust management of retirement savings and manage rather big assets. This causes confidence in their activity.
The expert has cleared up numerous future pensioners' fears concerning possible disappearance of the pension assets. "Most fears expressed by those against the accumulative system are hypothetic and only two of them have an economic basis, particularly, the high level of pension contributions (5%) and possible perturbations in the economy such as default or hyperinflation. "The latter is linked with the long-term effect of the pension reform. Theoretically, it is possible, because the economic situation of any country may considerably change within the next 20-30 years amid regular crises", says the expert. However, he stresses that Armenia, which has accumulated a big foreign debt, faces no prospect of default.
Concerning the size of pension contributions, Kayfajyan says that in some developing countries it is quite low. In some countries it changes depending on economic conditions.
Almost 7,000 people gathered in Liberty Square on Jan 19 to express their protest against the compulsory accumulative pension system. They marched to the building of the Constitutional Court and demanded that the court revoke the law that imposes the system. The court is to decide on Saturday, Jan 25.
The voluntary accumulative pension system was introduced in Armenia on Jan 1 2011. The system will 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). It is noteworthy that 6.6%-13% and not 5% of the monthly wages will be charged, as the charges will be made from the so-called "brutto-salary." On 15 November the Republican Party boycotted the extraordinary meeting of the Parliament over the issue. Later on 21 November, an action of protest was held in front of the Government against the pension reform.
Starting from Feb 2014 pension assets in Armenia will be managed by Amundi from France (subsidiary of Societe Generale (20%) and Credit Agricole (80%)) and C-Quadrat from Germany. During the first year the assets will make up $100mln. Amundi's assets total $1.3tln, C-Quadrat's assets $500bln.