Central bank deputy governor says 5,337 people chose their pension funds

YEREVAN, March 31. / ARKA /. Some 5,337 Armenian citizens born after 1973 have already chosen private pension funds to deposit their pension savings with, Nerses Yeritsyan, deputy chairman of the Central Bank of Armenia, said today to the Constitutional Court which has resumed hearing into the constitutionality of the new pension scheme that took effect on January 1.

The constitutionality of the law was challenged by three opposition parties in the National Assembly — the Armenian National Congress, the Armenian Revolutionary Federation, and the Heritage Party — along with the usually pro-government Prosperous Armenia Party.

"According to our estimates, at least 10,000 people have decided to let computer choose their pension funds,” Yeritsayn said in defending the new pension scheme.

One of them is a joint venture between Austria’s C-QUADRAT Investment and Germany’s Talanx Asset Management. The other, Amundi-ACBA, is a subsidiary of the French banks Credit Agricole and Societe Generale. Armenian officials expect the two asset managers to attract between $100 million and $150 million in pension contributions this year alone.  

When asked by the chairman of the Constitutional Court, Gagik Harutyunyan, why on January 1 there were only 150 people who had chosen a pension fund, Yeritsyan blamed it on "the lack of financial knowledge.”

The new pension system 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. That money has to be deposited with private pension funds licensed by the government late last December.  

A Gallup International Association’s public opinion survey conducted in Yerevan revealed that over 88 % of respondents do not support the new mandatory pension scheme. -0-