YEREVAN, January 22. /ARKA/. Funded pension system in Armenia should be voluntary, not compulsory, Larissa Alaverdyan, the executive director of Against Legal Arbitrariness nongovernmental organization and a former ombudswoman of Armenia, told ARKA News Agency on Wednesday.
“I think that introduction of the new pension system should be voluntary, since compulsory component tramples human rights,” she said.
Besides, the Armenian authorities enjoy insufficient public confidence for introduction of the mandatory funded pension system, and this little public confidence will melt away as a result of these reforms.
Recollections of the lost of savings in 1990s are still green in people minds, and they strengthen people’s skepticism about prospects of getting their accumulated money back.
The system was introduced on January 1, 2014. It applies to all the citizens born no earlier than on January 1, 1974. They will pay 5% of their salaries to their accumulative account every month, and the government will add another five percent, but no more than 25,000 drams ($61) to this amount every month, and no more than 300,000 ($740) for entrepreneurs.
The compulsory component of the pension system prompted backlash in the country. Protests are being staged in Yerevan. Nobody wants to commit 5% of their salaries to the government's trust, since people don't believe they will get their money back. -0----