Armenian pension reform bill passed in the last reading

Armenian pension reform bill passed in the last reading

YEREVAN, June 23. /ARKA/. Armenia’s National Assembly passed the bill package about the pension reform in the second and last reading at its session on Saturday.

Sixty eight out of 131 deputies voted for the bill, with almost all of them from the ruling Republican Party of Armenia (RPA). The remaining five factions – Prosperous Armenia, Armenian National Congress, ARF Dashnaktsutiun, Heritage and Orinats Yerkir, left the session in the morning, after the bill was passed in the first reading.

The parliament started discussing the amendments to the law about the funded pension and related bills at its special session on Thursday.

The amendments shield employees’ income from reduction after the enforcement of the new scheme. The obligatory funded pension scheme will apply only to public servants, whose salaries will be raised on July 1, and for the private sector’s employees it will be voluntary and will be applied stage by stage, within a three-year period.    

The new pension system that took force on January 1, 2014 and was suspended later since found contradicting the Constitution requires that all Armenian citizens born after 1973 pay social security taxes equivalent to 5 percent of their monthly wages, which will be matched and doubled by the government.
If an employee’s salary exceeds AMD 500,000, the government pays AMD 25,000.

On January 24, Armenia’s Constitutional Court suspended some provisions of the new, controversial law that aims to reform the country’s pension system to launch a detailed inquiry into the constitutionality of the law.

The highest court of the country suspended Article 76 of the new law, which provides for penalties for failed or delayed pension tax payments, and the third paragraph of Article 86, which obligates employed citizens to choose a pension fund, among other parts of the law.

On April 2, the Constitutional Court of Armenia found some provisions of the new pension law contradicting to the Constitution and voided them instructing the government to make changes here.

The National Assembly passed amendments to the law suspending enforcement of the compulsory component of the new pension scheme. It means compulsory component was transformed into voluntary.--0---

10:45 23.06.2014

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