Armenia Starting Mandatory Pension System
On June 11, 2018, Armenia’s government adopted new amendments to the Law on Funded Pensions.
According to the decision, beginning July 1, it will be mandatory for all employees on payroll to be included in the pension system, which means two and a half percent of their salary will be deducted by the employer and submitted to the government. Previously this contribution was five percent, and the government matched a further five percent. Now the new amendments mandate that the employees pay only 2.5 percent and the government will add the remaining 7.5 percent.
Pension assets are managed by two international companies: European Amundi Acba Asset Management and Austrian C-Quadrat Ampega Asset Management. Citizens will be able to receive the accumulated funds after their retirement.
The Mandatory Accumulative Pension System was supposed to come into effect on January 1, 2014. At that time, the “Dem em”(I am Against) initiative, which opposed the “mandatory” component of the system, took to the streets and they were joined by several political factions. During the same year, some of the provisions of the Law on Funded Pensions were disputed at the Constitutional Court, which ruled that some provisions of the law contradict the Constitution. On April 3, 2014, one of the strongest advocates of the system, then Prime Minister Tigran Sargsyan, announced his resignation, after which the new prime minister, Hovik Abrahamyan, attempted to find a solution to the issue.
A draft law was adopted allowing citizens to refuse to be included in the system. However, for the public sector employees the new pension system remained mandatory. Prime Minister Hovik Abrahamyan’s, as well as his successor Karen Karapetyan’s, governments postponed the introduction of the system until July 2018.
Artsvik Minasyan, ARF Dashnaktsutyun party member and Minister of Economic Development and Investments, opposed this decision at the government session. Newly appointed Minister of Labor and Social Affairs Mane Tandilyan was also against the “mandatory” introduction of the funded system. On June 12, Tandilyan announced her resignation, expressing her disagreement with the new pension reform. It is not yet clear whether Prime Minister Nikol Pashinyan will accept her resignation.
Read more: Armenia Starting Mandatory Pension System: What You Need to Know
Nikol Pashinyan’s visit to Moscow
On June 13-14, Prime Minister Nikol Pashinyan was in Russia to participate in the opening of the World Football Championship. This was Pashinyan’s second visit to Russia, the first being held on May 14 in Sochi. During his visit, Pashinyan met with the Russian President, Prime Minister and representatives of the Armenian community.
Summing up his Russia visit in a Facebook video, Prime Minister Pashinyan pointed out that Russian President Vladimir Putin introduced him to Azerbaijani President Ilham Aliyev during the sporting event. “The Russian president introduced us to each other, and that’s also information that I think you should know. No other talk or discussion occurred. In general, I am very satisfied with the results of the visit,” said Pashinyan.
Pashinyan was interviewed by Russia Today television network during which he spoke about lowering Russian gas tariff on Armenia.
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The Prisoners
On June 13, members of the Founding Parliament Jirair Sefilian, Gevorg Safaryan and four other activists were released from the courtroom. Sefilian was accused of “acquisition, sale, and possession of illegal arms and ammunition.” Sefilyan and Safaryan’s supporters consider them political prisoners.
After being released, Sefilian announced that they had reached an important milestone. For many years, the oppositionist “Founding Parliament” refused to participate in the elections, claiming that it legitimizes the authorities’ continued hold on power through fraudulent elections.
Karabakh war veteran Sefilian announced that Armenia is entering a new stage of political development and at that stage they will support the current government. “Founding Parliament” does not exclude its participation in snap parliamentary elections.
On June 15, the Court of Cassation overturned the verdict of the First Instance Court on Former Commander of Nagorno-Karabakh Defense Army Samvel Babayan’s case and the decision of the Criminal Court of Appeal. Samvel Babayan was convicted to 6 years in prison on charges of smuggling “Igla” surface-to-air missile into Armenia and circulating counterfeit Euro banknotes.
On June 15, the Court of Cassation ruled to release Samvel Babayan from custody on the basis of the recommendation of 15 MPs from the National Assembly.
Babayan supported the opposition Ohanyan-Raffi-Oskanian bloc during the 2017 parliamentary elections.
National Security Service enters Yerevan City hall
On June 13, the National Security Service broke into the Yerevan Municipality. “Yerevan Foundation” operates in the administrative building of the municipality. Mayor of Yerevan Taron Margaryan is the Chairman of Trustees board of the Foundation. Over the years, the municipality has transferred millions of Armenian Drams (AMD) to this foundation, and its management is not transparent to the public.
Earlier, Yerevan Council of Elders’ members from YELK parliamentary faction Lena Nazaryan and Arayik Harutyunyan had appealed to the court, demanding that the Yerevan Foundation provide the names of the citizens who transferred 100,000 AMD (about $200) and more to the foundation, as well as information on the amount of donations. This case is still in the court’s proceeding.
The National Security Service announced that senior officials of the municipality had obliged citizens to transfer large amounts of money to the foundation’s account for construction and property registration permits.
Ashot Ghazaryan, director of Yerevan Foundation and Khachatur Kirakosyan, deputy head of Davitashen administrative district of Yerevan, were arrested.
