Armenian government selecting companies for running accumulative pension fund’s assets

YEREVAN, November 29. /АРКА/. Armenian government is selecting companies which can run the accumulative pension fund’s money, Deputy Finance Minister Vardan Aramyan told journalists on Thursday. 

“Some companies have already expressed their ambition to run the assets,” he said. “Now Capital Asset Management aspires to run the voluntary accumulation system’s funds, and Global Asset Management wants to run the obligatory system’s funds.”

Aramyan said that the obligatory system implies more liabilities and guarantees from companies, compared with the voluntary system. That is why Capital Asset Management, which has no sufficient capacity, can aspire only to management of the voluntary system’s assets, while Global Asset Management runs several countries’ funds totaling $400 billion and has already won international recognition and has high chances to run the obligatory system’s assets. 

“We need reputable companies enjoying international recognition for managing the obligatory system’s funds,” Aramyan said. “Money will be collected compulsory. That is why we should minimize risks, and therefore we need reliable managers to these assets, such as the Global Asset Management.”

Aramyan said that the government is now considering candidacies of five or six organizations which expressed wish to run the accumulative pension fund’s assets. 

“I think our dialogue with these companies is positive and hope we will make our choice in 2013,” he said. 

The pension system reformation was launched in Armenia on January 1, 2011. The obligatory accumulative pension system is planned to be introduced in the country in January 2014. The system targets all those citizens born later than Jan 1, 1974. 

The accumulated funds will enable future retirees to shape the size of their pensions at own discretion. 

Under the reform plan approved by the government years ago, Armenia was to switch to the new system in January 2010 whereby the amount of monthly benefits paid to retired citizens will depend on their and their employers’ contributions to the fund. People will send to their accumulative pension account 5% of their salaries every month, and another 5%, but no more than AMD 25,000, will be added by the government. ($1 – AMD 405.71). -0-