PM justifies keeping mandatory pension system citing jeopardy issues

The Prime Minister has approved his Cabinet’s decision on ensuring the stable operations of the mandatory accumulative pension system. The new decision of the government has decreased the rate for citizens, thus citizens who are included in the system will pay 2,5%, while 7,5% will be covered by the government. Previously citizens were charged 5%, and the government was covering the remaining 5%.

The PM touched upon the issue in a live Q&A on Facebook.

From June 1, all employed citizens born after 1974 will be included in the system.

As the law wasn’t met with much joy, Pashinyan’s Cabinet tackled the issue by reducing the rate, but nevertheless not everyone was happy.

Pashinyan’s minister for labor and social affairs Mane Tandilyan, a strong supporter of abolishing the “mandatory” component of the system, even stepped down yesterday.

Pashinyan also weighed in on the option of postponing the system for a year, saying it would create unequal and unjust conditions for the over 200 thousand citizens who have been under the system until now.

He said Armenia’s reputation would be jeopardized if the government had ceased the system totally. He said the government might have had conflicts with managers of the funds in that case.

Thus, the PM justified his Cabinet’s decision, and added that citizens will pay an average of 5000 drams less in pension taxes from July 1.