Friday, February 18 2011 14:33
Pension funds in Armenia to start operating in April 2011
ArmInfo. Pension funds in Armenia will start operating in April 2011, Head of the Pension Provision Department of the Ministry of labor and Social Affairs Smbat Sahyan told media on Friday.
He said that some actors in the financial market, specifically investment companies, are currently negotiating with the mega-regulator for a license to manage assets of the pension fund. S. Sahyan recalled that local enterprises and privates who intend to open accumulative pension accounts can use relevant services of local banks.
"Pension deposits are registered at banks as before with a single difference i.e. from now on allocations of the citizens will be registered in the base of their income tax hereby reducing the size of that tax," S. Sahyan said.
Experts say that annual volume of savings within the voluntary pension system will total $5-$12 million. Two investment companies, Capital Asset Management and Cascade Investments, had already expressed an interest in management of pension assets earlier. The key idea of the reform is to give the employer who joins the voluntary pension provision schemes quite significant tax privileges.
A number of other experts think that the Government of Armenia has no intention to reform the effective pension system and postponed the reform till 2014. On Jan 1 2011, voluntary system of accumulative pension provision was introduced in Armenia. The system will become compulsory starting Jan 1 2014. The bill on introduction of the accumulative pensions system in Armenia stipulates that the minimum pension will be equal to the subsistence minimum and the basic pension will total 150% to the subsistence minimum.
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