Problems of Funded Pension System
20.05.2016
13:00
“The year of 2017 is a pre-election year and it is natural that the authorities do not want the dissatisfied part of the society to be in the street. That is why they initiated the delay of compulsory component of the funded pension system for the private sector,” Mane Tandilyan, member of “Bright Armenia” Party, said this at Media Center.

Former member of “I am against” movement said. “We intended to give new impetus to the movement by the petition in order to put off, to remove and make it volunteer. We deeply believe that only trustworthy authorities can propose such a risky system and it can be only volunteer. They put off the compulsory component to restrain the protests, on my opinion,” Mane Tandilyan said. 

During the discussion of the Draft on RA Law amendments about the Funded Pension System Social Security Minister Artem Asatryan said that this changes are necessary in order to implement this reform and the new tax legislation simultaneously as well as to have time for more public awareness. Tandilyan considers these arguments to be groundless.

“A year has passed and this is enough time to increase public awareness if there was such a procedure and will at all. We also emphasized numerous times that the public awareness is not enough. What concerns the delay and the adoption of the law, there are now people who are in the system and who said that if they joined now, it would be impossible to move that system or make corresponding changes,” Tandilyan added.  

Armenian Revolutionary Federation expert, economist Suren Parsyan said that the 2016 budget involves a section of targeted social payments, which was not there before.

“Are the targeted social payments guaranteed? According to the decision of the Constitutional Court, the targeted social payments not only to the extent that the person is invested plus the inflation rate, but also must be guaranteed by public funds. There is no guarantee yet and the distrust towards the system is strengthened,” Parsyan said.

The expert also spoke about Artem Asatryan’s announcement at the National Assembly according to which 145 thousand people are involved in the system up to now, 65 out of which are state and the rest is private representatives. “All state representatives pay mandatory, private sector representatives joined the system willingly or they did not apply for refusal – overall about 3000 people.”

The speakers said that bank workers are also private sector. Mane Tandilyan said that as the banks are under the control of the Central Bank, they did not allow their workers to submit applications, Suren Parsyan said that instead of it their salaries were increased.

“So that sector was also mandatorily included,” Tandilyan concluded.

Accountant Shogher Babayan said that that up to now she receives mails from enterprenuers who did not manage to submit refusal applications.  

“Most of the enterprenuers did not manage to submit applications. People were abroad, they had 5 months, why was it reduced to ten days?” Babayan said.   

Suren Parsyan said. “Now we have 36 billion AMD in the funded sytem. Where was this money invested? Do we have a developed market of stocks to be invested and have percentages? Most part of funds have been invested in government bonds. The amounts came from state system to the fund and came back to the state system.”

Shogher Babayan emphasized also the civil perception of the problem. What does the citizen want from this reform?

“Why do we need this funded pension system? Tigran Sargsyan made such an announcement: when these young people will be old, pensions, we will have fewer young people and they would not be able to provide pensions for those people. But why should it be so? Why should we have such a forecast that young people will be fewer?” Babayan added.

Suren Parsyan said. “ When we asked why it was given to the people after January 1, 1974, they just pointed out that we took into account actual mathematical calculations that the money can be accumulated during 23 years in order to have a decent retirement, pension and so on.It was delayed for 3 years and now a year is also delayed, where are your calculations?”

Arevik Sahakyan, Program coordinator at “Media Center”

To contact the author please send an email to areviksahakyan@mail.ru

 

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