Friday, December 16 2011 15:40
Armenia needs reliable and experienced pension fund regulators
ArmInfo. The public will embrace a new economic thinking within the coming 10 years thanks to the pension reform that will enhance economic reforms, Prime Minister Tigran Sargsyan said at a two-hour forum in Yerevan, Friday. During the event the prime minister and a number of statesmen summed up results of the work carried out to introduce an accumulative system of pension provision in 2014.
The major goal of the forum, the prime minister said, is to draw the public attention to pension reform and explain its logic. He recalled that the Armenian Parliament passed a legislative package a year ago, which initiated these reforms in the country.
Creating the conception of a new system, it is important to reckon with the global economic trends and understand the arrangement of the future world, the prime minister said.
The prime minister believes that the new pension system allows more efficient risk management, as it is more flexible and consists of three levels: basic, compulsory accumulative and voluntary. The first component, Tigran Sargsyan said, guarantees social protection of the population incapable of work. This category of people will enjoy affluent old age. The second component is for economically active people who should care for their old age themselves. And the third component is the voluntary accumulative system that allows citizens to make additional savings besides the compulsory ones, the premier said.
In the accumulative system, citizens must have certain knowledge to choose their asset managers. Every future pensioner can follow his accumulative account and assess the work of the pension regulator. The government, in its turn, must create all the necessary infrastructures and favorable environment for pension funds that will insure safety of pension assets. In this context, Sargsyan said, the country needs reliable companies having experience in pension asset management.
The prime minister said that in the period of the active phase of the crisis when the budget revenues slumped, the government fulfilled its social commitments and even increased pensions and allowances. This approach will be observed also in 2012. The premier recalled that starting Jan 1 2012 pensions and allowances will be increased by another 10%. He briefed on introduction of the single social tax. To recall, voluntary accumulative pension system was introduced in Armenia on Jan 1 2011, which will become compulsory starting Jan 1 2014. The minimal pension will be raised to the living wage with the basic pension to total 150% of the living wage.
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