Human rights activist says Armenia’s pension system is a financial ‘pyramid ‘
16.07.2015,
18:39
The funded pension system which the government of Armenia will make obligatory also for private sector in several years is actually a financial pyramid, claimed today a human rights activist Artak Zeynalyan, who is chairman of a non-governmental organization called Rule of Law.
YEREVAN, July 16. / ARKA /.The funded pension system which the government of Armenia will make obligatory also for private sector in several years is actually a financial pyramid, claimed today a human rights activist Artak Zeynalyan, who is chairman of a non-governmental organization called Rule of Law.
Speaking to reporters, he said the absence of guarantees in the law that the contributions made by workers will be returned to them when they reach retirement age speaks of the meaninglessness of the funded pensions system ‘and if this provision was recognized as unconstitutional by the country’s Constitutional Law, it should be extended to the entire law.’
‘We have always said that the funded pension system the government wants to make obligatory is actually a financial pyramid and the truth is that such schemes should be destroyed, " Zeynalyan said.
Zeynalyan was backed by a parliament member Artsvik Minasyan from the opposition Revolutionary Federation/Dashnaktsutyun party, who said the law on pensions that was passed in the final reading by the parliament late last month will not bring any good.
On July 7, 2015 the Constitutional Court of Armenia ruled that a number of provisions of the law objected by a group of MPs did correspond to the Constitution. It however, ruled that some other provisions which do not guarantee the return of contributions made additionally by the government to employees’ payments which are to be adjusted with the annual inflation rate, do not comply with the Constitutional and invalidated them.
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. The law applies only to public sector employees so far and will be extended to private sector as well in several years. -0
Speaking to reporters, he said the absence of guarantees in the law that the contributions made by workers will be returned to them when they reach retirement age speaks of the meaninglessness of the funded pensions system ‘and if this provision was recognized as unconstitutional by the country’s Constitutional Law, it should be extended to the entire law.’
‘We have always said that the funded pension system the government wants to make obligatory is actually a financial pyramid and the truth is that such schemes should be destroyed, " Zeynalyan said.
Zeynalyan was backed by a parliament member Artsvik Minasyan from the opposition Revolutionary Federation/Dashnaktsutyun party, who said the law on pensions that was passed in the final reading by the parliament late last month will not bring any good.
On July 7, 2015 the Constitutional Court of Armenia ruled that a number of provisions of the law objected by a group of MPs did correspond to the Constitution. It however, ruled that some other provisions which do not guarantee the return of contributions made additionally by the government to employees’ payments which are to be adjusted with the annual inflation rate, do not comply with the Constitutional and invalidated them.
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. The law applies only to public sector employees so far and will be extended to private sector as well in several years. -0
