YEREVAN, January 17. / ARKA /. A former Armenian parliament member Vardan Bostanjyan questioned today the ability of the government to handle the so-called funded mandatory pension system arguing that it will not work in a country plagued with dire social and economic problems.
The reformed pension system whereby the amount of pensions will depend on workers’ lifelong contributions to pension funds is effective from January 1. It requires that all Armenian citizens under the age of 40 pay more social security taxes.
More precisely, all citizens born after January 1, 1974 will have to transfer five percent of their nominal salaries to their personal retirement savings funds. The government promises to transfer as much every month, but no more than 25,000 drams ($62).
"The so-called pension reform is absurd, illogical in essence and can not work in the current socio-economic situation,’ he said to a news conference.
The reform caused a wave of protests of many Armenians, largely young highly-paid professionals.
The protesters say they do not want to trust 5 % of their salaries to the government, because they are not sure they will get it back upon reaching the retirement age of 63.
The three opposition parties represented in the National Assembly- the Armenian Revolutionary Federation (Dashaktsutyun), the Armenian national Congress (ANC) and the Heritage as well as the Prosperous Armenia Party appealed to the Constitutional Court to scrap the ‘controversial’ reform of the national pension system. -0-