YEREVAN, December 12. / ARKA /. Armenian prime minister Tigran Sargsyan said today the introduction of mandatory funded pension system can not be delayed.
Speaking in parliament following the discussion on 2014 draft budget he recalled that it took Armenia 10 years to prepare a pension reform. He said two presidents, three prime ministers, four coalition parties, dozens of experts and international organizations had worked on it.
Sargsyan said that Armenia has now about 510,000 retirees, and the next year’s budget has earmarked 240 billion drams as pensions. He said the average pension in the country will be 36,000 drams.
"We realize that this amount is not enough to ensure a decent old age. Considering that the minimum consumer basket is worth 41,000 drams, and health services – 51,000, it appears that hundreds of thousands of retirees are below the poverty line,” he said.
He said to bring the average pension to the minimum consumer basket will require additional 270 billion drams, which is an excessive burden given that 500,000 citizens in Armenia today pay flat tax and that revenue collection can be improved only by increasing the income tax or changing the retirement age.
Sargsyan also said that Armenia is considered an aging country, since about 15 % of its population is older than 60, and in the next 10 years the number of retirees will increase significantly.
Under the new pension plan to come into effect in January 2014, all Armenian citizens born after January 1, 1974 will have to transfer five percent of their nominal salaries to their personal retirement savings fund. The government promises to transfer as much every month, but no more than 25,000 drams ($62).