MP from ruling party defends compulsory pension scheme

YEREVAN, March 24. / ARKA /. Gagik Minasyan, the chairman of an Armenian parliamentary committee on finance and budget issues fr0m the governing Republican Party of Armenia, argued today that the compulsory pension scheme, effective from January 1, would help resolve social problems of the country.

Speaking at a news conference he said the positive results of the pension reform would be felt in a few years, explaining that pension savings would help develop businesses and create new jobs, which in turn would allow the government to address many social problems.

Mr. Minasyan spoke after the latest demonstration against the compulsory pension scheme held on March 22 which attracted several thousands mostly young people.

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. 

Armenia’s Constitutional Court suspended last month Article 76 of the new law, which provides for penalties for failed or delayed pension tax payments, and the third paragraph of Article 86, which obligates employed citizens to choose a pension fund, among other parts of the law. The Court says it will conclude the inquiry on March 28, 2014.

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.

On the anticipated verdict of the constitutional court, Minasyan said it would be final and should be accepted by all. -0-