NEW PENSION SYSTEM TO COME INTO FORCE IN ARMENIA FROM JANUARY 1, 2008

Noyan Tapan
Jan 15 2007

YEREVAN, JANUARY 15, NOYAN TAPAN. The new mixed pension system wil
start functioning in Armenia from January 1, 2008. As the Noyan Tapan
correspondent was informed by the RA Social Insurance State Fund,
as of that day, citizens below 30 will surely be involved in the
new pension system. And people at the age of 30-45 will be given
possibility of choice, to stay in the old system or to pass to the
new one. Citizens after 45 will stay in the old pension system.

The new pension system will involve 4 degrees: old age minimum social
benefit, base pension, obligatory and saving pension, voluntary
saving pension. The pension size will be decided by the new system
according to the same scheme: base pension which will be given by
the state, the capital of the pension gathered during the summed up
years divided the middle duration of life followed the pension age
what makes 19-20 years in Armenia. In this case, factually not the
state but a citizen himself decides the size of his pension by the
money paid by himself. As a result, the size of the pension being
got is closer to the size of the payment got before that.

The pension system reforms are necessary also in the sense that
if they are not initiated it will be necessary to make the process
of collecting social payments more effective in parallel to change
of the demographic picture in Armenia: reduction of the number of
population able to work and adding of the number of people at the
pension age. About 432 thousand paid employees pay social payments
for 530 pensioners’ pension. Factually, 0.9 paid employee falls to
1 pensioner’s lot what is a great weight for the working population.

The necessity of reformation of the present system is provided by a
number of factors: the social justice principle is violated, people
made higher social payments get relatively less pension.

From: Emil Lazarian | Ararat NewsPress