ARMENIAN PARLIAMENTARIAN: DESPITE ITS ADVANTAGES, PENSION SYSTEM REFORM MAY DAMAGE GOVERNMENT REPUTATION AMONG POPULATION

ArmInfo
2010-03-30 12:39:00

ArmInfo. "Despite its advantages, the pension system reform may
damage the government reputation among the population," says Hakob
Hakobyan, Head of the Parliamentary Commission for Social Affairs,
in an interview with ArmInfo when commenting on the risks related to
creation of private accumulative funds.

He said that the state budget will envisage as much funds for the
pensions as the additional accumulative funds will collect, in
particular, 5% of the salary of the citizens permanently working in
Armenia will be transferred to the fund. A similar amount will be
provided to the pension fund by the state budget every month. "Here
are the risks connected with the reform: first, if we do not guarantee
return and profitability of the amount, we will cause damage to our
citizens proving budgetary funds without guarantees. If we guarantee
safety of those amounts, in 5 or 10 years the budget will prove
to be under additional burden of liabilities, which is dangerous
for the country. In the first case, there is a risk of damaging the
government reputation among the population, whereas in the second case,
the country is endangered," the parliamentarian explained.

The new pension system will be introduced in 2011. The reform implies
transition to a multi-level pension system that will consist of two
key components: state distribution and private accumulative pension
system. The key direction of the pension reform program is to ensure
proper pensions for the citizens through gradual improvement of the
state of pension age people as well as ties between the pensions and
personal salary of the citizens through introduction of compulsory
accumulative pension system.
From: Baghdasarian