PERSONAL RETIREMENT ACCOUNT IS INTRODUCED
KarabakhOpen
26-01-2008 14:56:56
By the December 25, 2007 decree of the NKR government the personal
retirement account will be introduced in Karabakh. It means that each
working citizen will have a personal retirement account.
We turned to Vahram Arakelyan, head of the department of social
security and retirement of the NKR Ministry of Social Security for
more detail. He says each working citizen will have an account in
the government fund of social security, where information about the
work of each citizens and the size of wages will accrue all through
his or her years of service.
Presently, the size of pension is based on the basic retirement benefit
set by the government and the years of service. Now two people who
earn different wages but work for equal number of years get an equal
retirement benefit. In other words, the volume of the social tax paid
by the given person is not taken into account.
Vahram Arakelyan says after the introduction of the personal account
the size of the retirement benefit will depend on the size of social
taxes. It means if the employer fixes a lower wage in records to
avoid social payments, the employee must be interested in putting
down the full size of his of her wage because the size of his of her
retirement benefit depends on it.
In this connection, there will be problems with temporary workers. For
instance, workers who are hired to work for construction companies
should demand that the employer sign a contract with them.
"The data of the personal account – salaries and social tax –
will be presented in the annual statements of employees. Besides,
the citizens can apply to the retirement fund for a statement of
their personal account, express their disagreement if they have any,
demand a change," Vahram Araklelyan says.
the head of the department said the heads of organizations and
companies should submit statements since 2004 because those data must
also be included in the personal account. Preparations have already
started, and applications will be accepted from May. "In the upcoming
one or two years the fund will send statements of personal accounts
to citizens," the head of the department concluded.