Compulsory component of pension system to be used by September 30

The compulsory component of the pension system will be used until September 30, Armenian Justice Minister Hrayr Tovmasian told a press conference today.

“The Constitutional Court of Armenia ruled that a number of elements of the compulsory component contradict the Constitution, but the Court did not say that the compulsory component shall be abolished,” the minister said.

He stressed again that the Law on Accumulative Pensions will be fully in effect until September 30, all the provisions of the law are subject to application and their non-application is fraught with legal problems.

According to Hrayr Tovmasian, a working group will be set up to bring the provisions recognized as unconstitutional into line with the Constitution. “I hope that civil society and the opposition will take an active part and we will have an invulnerable system” he said.

The justice minister enumerated several cases, in which a decision of the Constitutional Court takes effect upon adoption. In his words, in some cases the decision’s entry into force may be postponed if recognition as unconstitutional at the given moment is dangerous and the decision shall be postponed ‘to avoid greater danger’, which was done because ‘there are unsolved issues’.

The minister stressed that the pension contributions made on January-March 2014 shall not be refunded. “Mechanisms of recalculation will be developed. Discussions will show which model will be chosen,’ he said.

We would remind you that the four non-coalition factions of the Armenian parliament – ARFD, Prosperous Armenia, Armenian National Congress, and Heritage factions filed a lawsuit to challenge the constitutionality of some provisions of the Law on Accumulative Pensions. On April 2 the Constitutional Court announced its 64-page decision on the case. By the ruling, several articles of the law are recognized as contradicting the Constitution and null and void.