Prime minister: There is no alternative to pension reform

“The compulsory component of the accumulative pension system will be introduced in Armenia in a few days. It is a reform we started to prepare for 10 years ago. Two presidents and various experts worked on the development of the compulsory component. A lot of discussions have been held in ten years. I want to stress that pension reforms are considered one of the most complex in the world, including in Armenia, “Prime Minister Tigran Sargsyan said today during discussions of the 2014 draft state budget in the parliament.

In his words, the government has received numerous proposals, only 27% of which were rejected.

“We are convinced that there is no alternative to the pension reform we have submitted. It is a fair system, your work is taken into account and there is now an incentive to earn your pension. From now on not only the state, but also working citizens will be responsible for a well-off life in old age,” the prime minister said.

As regard citizens’ discontent, T. Sargsyan reminded those present about motor vehicle liability insurance, whose introduction prompted opponents to voice similar statements. “Yet two quarters later, the majority of society began to assess positively that system. We are sure that the compulsory accumulative pension system’s introduction will also draw a positive response of our citizens,” the prime minister said.

The introduction of the compulsory accumulative pension system is stipulated by the Law on Accumulative Pensions adopted by the Armenian parliament in 2010. The voluntary accumulative component has been used since 2011, while the compulsory component will be introduced on January 1, 2014. Citizens born after 1974 will have to pay 5% of their salaries to special accumulative funds and another 5% will be paid by the state.

Opponents of the system say it violates rights of citizens and contradicts the Constitution.

A special session of the Armenian parliament convened on November 15 on the initiative of opposition BHK, HAK, Heritage, and ARFD factions did not take place due to lack of a quorum. The issue of postponing the compulsory accumulative pension component’s introduction for a year was to be discussed at that session.