As a result of implementing the state mandatory pension reform the average pensions in Armenia will reach only 44,400 AMD.

The main justification of the pension reform is that the government promises decent pensions to senior citizens. But is it really so? Let us try to understand how much an average pension will be due to the new pension system. For the calculation let us pick the recent figures.

And so the new system includes 18-40 year old citizens. Let us pick the average year 29. Let us pick the average monthly salary from the data of 2013, which is 151,000 AMD, which by the best scenario we are planning to increase by 5%. Let us also assume that we will be receiving incomes from the pension eligible age too. It means we are receiving pension and the manager of the pension fund continues to manage the means of the pension fund, by providing additional income.

According to calculations the pension period is 11 years, starting from the pension age of 63 and based on the average expectancy of life 74 years. So based on these data let us calculate the amount of our pensions during the pension period with such optimistic colors. During these 34 years 15,4 million AMD was deposited in the pension fund, 7 million of which was deposited by the state and the rest by the citizen. Based on that, the monthly average pension will be 309,000 AMD, the current value of which is 40,400. And the purchasing capacity of 309,000 will be equal to today’s 40,400. It means as a result of the reform the average salary will be 40,400. Today the average pension is 36,000. This means that the value of this whole reform is 4,400 AMD.

By Mesrop Arakelyan