From July 1, 2018, the mandatory funded pension system will become  mandatory for all categories of citizens of Armenia

ArmInfo.From July 1, 2018, the mandatory funded pension system will become mandatory for all categories of Armenian citizens. Deputy Minister of Finance of the  Republic of Armenia Karen Tamazyan stated this on July 3 from the  rostrum of the Armenian parliament, presenting the draft amendments  to the law on the mandatory funded pension and the package of  accompanying laws that were adopted by the RA National Assembly on  October 4 in the first reading.  

According to Tamazyan, the government of the country does not intend to extend the terms of  implementation of the provisions of the current law, which will  become mandatory for all. The package presented by the executive body  is aimed at solving 2 tasks. The first change concerns powers to  regulate issues related to the funded pension system. So, the  government proposed to redistribute these powers between state  structures and the Central Bank, which will allow the financial  market to become more flexible. The powers will be divided between  the Ministry of Finance, the Ministry of Labor and Social Affairs,  the State Revenue Committee and the Central Bank in order to make  common decisions.  Coordination of work is handled by a working  group. The second change concerns allocations to accumulation funds  and to the state budget by Armenian citizens who work in  international structures. It is about the procedure of 50 persons for  whom a system has been created, through which they will be able to  pay out funds to both funded funds and 23% income tax to the state  budget.  The deputy minister said that on the basis of the decision  of the Constitutional Court, the government of the country is  developing another package of bills, which in due course will be  submitted to the parliament of the country.

Earlier, the Minister of Labor and Social Affairs Artem Asatryan  reported that at present the number of participants in the mandatory  funded pension system exceeded 180 thousand people. Most of them are  representatives of the private sector. According to the Minister, as  of today, 80 billion drams have been accumulated in management  companies within Armenia. Based on the results of three years, as a  result of the work done in the direction of assessing the  effectiveness of management, the funds increased by about 32%, which,  according to the minister, is a fairly good indicator. "The specified  amount is introduced into the relevant instruments and their return  is guaranteed by law," stressed the head of the Ministry of Labor and  Social Protection.

It should be noted that the Government of Armenia in its new program  for 2017-2022 envisages, together with the Central Bank, to take  steps to increase the availability of financial instruments and the  formation of long-term pension savings, the infusion of which into  the real sector will stimulate economic development and increase  investment. In particular, the Government provides for the end of  2018, together with the Central Bank, to develop a capital market  development program aimed at encouraging the issuance of shares and  bonds by local companies. Until the end of 2019, the Government  envisages, together with the Central Bank, through the necessary  right regulation, to increase the availability of financial services.  Until the end of 2020, to expand the pension savings system, the  Government together with the Central Bank will develop a medium-term  program for the development of the insurance market aimed at  introducing new insurance instruments and launching life insurance.  It should be recalled that since January 1, 2014, a multi-step  accumulative pension system has been introduced in Armenia, mandatory  for people born after January 1, 1974 (for citizens born before  January 1, 1974 there is a distribution pension system). According to  the new law of the Republic of Armenia "On funded pensions," the  basic minimum pension will be equal to the subsistence minimum, and  the basic pension will be 150% of the subsistence minimum. The  monthly mandatory payments will make 5% of the salary, 5%, but not  more than 25 thousand drams, and for entrepreneurs 300 thousand  drams, the savings account will be contributed by the state. There  are two pension funds in Armenia under the mandatory funded pension  system: Amundi-ACBA Asset Management (since November 19, 2013) and  Tse-Kvadrat Ampega Asset Management Armenia LLC (since November 29,  2013). The shareholders of ZAO Amundi-ACBA Asset Management are a  French company - 51% and ACBA-Credit Agricole Bank - 49%.  Shareholders of LLC "Tse-Kvadrat Ampega Asset Management Armenia" are  the Austrian investment company C-QUADRAT Investment AG - 74.9% and  the German company Talanx Asset Management GmbH - 25.1%. Members of  the funded pension system (NPS) can regularly receive information on  the accumulated amount on their pension account through the Internet,  www.epension.am website, account operators and ATMs.