Armenian parliament passes law to reform pension system in second reading
21.12.2010,
21:44
Armenian parliament members from the oppositional Armenian Revolutionary Federation/Dashnaktsutyun (ARF) and the Zharangutyun (Heritage) party have boycotted today a second reading of a government-designed bill calling for a sweeping reform of the country
YEREVAN, December 21, /ARKA/. Armenian parliament members from the oppositional Armenian Revolutionary Federation/Dashnaktsutyun (ARF) and the Zharangutyun (Heritage) party have boycotted today a second reading of a government-designed bill calling for a sweeping reform of the country’s pension system.
A deputy labor and social security minister Artem Asatrian told the lawmakers that the bill on amending the pension system had been changed after the first reading. One of the incorporated changes extends the so-called accumulative system to employees of prosecutor’s office. He said a total of 350 proposals and suggestions had been made after the first reading and some of them were accepted. Particularly the revised bill specifies the procedure for calculating the size of pensions of people working in cultural and educational sectors. Another amendment, made to the Law on Income Taxes, according to the deputy minister, provides some tax privileges to some categories of citizens, who will shift voluntary to the new pension system.
Under the draft law, the mandatory private pension system is set to take effect in January 2014, while the new income tax will be implemented in January 2011. Beginning from 2014 all people aged 40 and below will have to shift to the new accumulative system under which each employer will place 5% of his or her monthly wage on their accumulative pension accounts. The government will add another 5% to it, but no more than 25,000 Drams.
Future pensioners will be able to themselves choose a managing company to handle their accumulative accounts. These companies may invest the pension funds into various securities, including outside Armenia.
On Monday the Armenian Revolutionary Federation called on members of parliament to vote against the bill. An ARF parliament member Artsvik Minasian said the reform will not provide adequate pension benefits for pensioners. He argued that the proposed amendments will cover only 700,000 of the 1.5 million people who are active in the Armenian economy. The remaining portion, particularly the unemployed, will be left out of the system, he added.
According to government data, some 521,000 of Armenia’s 31.1 million population are pensioners. The average pension size is 24, 570 Drams. ($1 – 360.5 Drams) -0-
A deputy labor and social security minister Artem Asatrian told the lawmakers that the bill on amending the pension system had been changed after the first reading. One of the incorporated changes extends the so-called accumulative system to employees of prosecutor’s office. He said a total of 350 proposals and suggestions had been made after the first reading and some of them were accepted. Particularly the revised bill specifies the procedure for calculating the size of pensions of people working in cultural and educational sectors. Another amendment, made to the Law on Income Taxes, according to the deputy minister, provides some tax privileges to some categories of citizens, who will shift voluntary to the new pension system.
Under the draft law, the mandatory private pension system is set to take effect in January 2014, while the new income tax will be implemented in January 2011. Beginning from 2014 all people aged 40 and below will have to shift to the new accumulative system under which each employer will place 5% of his or her monthly wage on their accumulative pension accounts. The government will add another 5% to it, but no more than 25,000 Drams.
Future pensioners will be able to themselves choose a managing company to handle their accumulative accounts. These companies may invest the pension funds into various securities, including outside Armenia.
On Monday the Armenian Revolutionary Federation called on members of parliament to vote against the bill. An ARF parliament member Artsvik Minasian said the reform will not provide adequate pension benefits for pensioners. He argued that the proposed amendments will cover only 700,000 of the 1.5 million people who are active in the Armenian economy. The remaining portion, particularly the unemployed, will be left out of the system, he added.
According to government data, some 521,000 of Armenia’s 31.1 million population are pensioners. The average pension size is 24, 570 Drams. ($1 – 360.5 Drams) -0-
