REFORMS OF ARMENIA’S PENSION SYSTEM REQUIRE CONSIDERABLE FINANCIAL RESOURCES

Noyan Tapan
March 11, 2010

YEREVAN, MARCH 11, NOYAN TAPAN. Reforms of the pension system will
start in Armenia in 2011, as a result of which the country will
switch to a multistage pension system. Head of the RA State Social
Security Service Vazgen Khachikian said during the March 11 press
conference that the problem of pension reforms arose in Armenia as
long ago as 1995. In his words, pension reforms take much time and
require considerable financial resources.

He explained that when a citizen retires, the pension will be
calculated based on his (her) contribution. "The principle of
determining the amount of the pension will be clear and comprehensible
to the citizen: this amount will depend on how many payments the
given citizen made during his (her) labor activity," he said.

According to V. Khachikian, the rise in gas and water tariffs will
not result in social unrest. "If we take into account the fact that
the pensions have almost doubled in the past three years, no matter
how much the water and gas tariffs rise, they will not exceed the
indices that we have had in the form of increased pensions, benefits,
other social payments," he said.

He noted that in connection with the tariff rise, the government is now
discussing several scenarios, including the review of family allowances
and social subsidies. The department head assured those present that
the government will put forward the appropriate initiative until
April 1. In his words, it will be possible to obtain the necessary
money so that the growth of gas and water prices will not affect
negatively the socially vulnerable groups.