Tuesday, February 28 2017 15:02
Alexandr Avanesov

Compulsory component of funded pension system comes into effect on 1 July 2018 for all Armenian citizens born after 1 Jan 1974

Compulsory component of funded pension system comes into effect on 1  July 2018 for all Armenian citizens born after 1 Jan 1974

ArmInfo. The compulsory  component of the funded pension system will come into effect on 1  July 2018 for all Armenian citizens born after 1 Jan 1974, Deputy  Chairman of the Central Bank of Armenia Nerses Yeritsyan said in the  Parliament, when presenting the amendments to the Law "On compulsory  funded pension system" in the second reading.   

Yeritsyan said that at the moment the pension funds managing the  funded pension system ensure such a high level of controllability  (27%) that there is no need to index the invested funds. He stressed  that the annual state co-financing in the pension funds makes up 14  bln AMD, and the population also transfers a similar amount.     

Yeritsyan refuted the popular opinion that these funds will be  pulverized as soon as Armenia joins the ruble zone. He noted that  there are no prerequisites yet for Armenia's accession to the ruble  zone. "This issue is not being discussed", he said, noting that the  EEU does not want to repeat the mistakes made by the European Union.  The matter concerns integration of the EEU financial markets by 2025,  which is necessary for activities of Armenian banks, brokers and  dealers on the EEU markets without additional licenses. Yeritsyan  added that the funded pension system is being applied with due regard  for the best models of foreign countries. 

On Feb 28, the Armenian Parliament started discussing the draft  amendments to the "Law on compulsory funded pension" in the second  reading. Deputy Chairman of the Central Bank of Armenia Nerses  Yeritsyan said that the draft amendments aim to enhance the  efficiency of the compulsory funded pension system management and to  increase its transparency. In particular, the draft law regulates the  process of compensating for the damage received by the participants  of the pension funds. It also expands and toughens the  responsibilities of the managers of these funds. The persons with  high incomes, who have already made sure of the efficiency of the  funded pension system, are allowed to voluntarily continue their  participation in the system by paying 10% of their salaries  (otherwise, the current 5% rate will be applied).  The managers of  the funds will get an opportunity to invest 10% (versus the current  2%) of all assets in venture and private funds. This will make it  possible to finance the highly-productive sectors of industry.  The  draft law also envisages enhancement of transparency of the funds. At  present, an individual has an opportunity to apply to the funds for  accountability once a year.  Under the amendments, it is possible to  apply for annual reports at any moment via electronic means. In  addition, the citizens of Armenia, who participate in foreign funded  pension funds will be able to transfer their money to the funds in  Armenia and to manage them. 

Earlier, ArmInfo reported, citing the Central Bank that within  mandatory funded pension system the number of participants of the two  pension funds-C-QUADRAT Ampega Asset Management Armenia and  Amundi-ACBA- Asset-Management reached 155 thousand people by November  1, 2016. 65 thousand of them are representatives of state sector and  remaining 90 thousand of private sector. The press-service of the  Armenia's Central Bank has told ArmInfo that from the moment of  creation of these two funds (November 2013) their yield has reached  25.9% (the cost of one common share has grew from 1000 to 1259  drams). For the 10 months of 2016 yield of the pension funds totaled  annual average 14.4%.  According to the source, as of November 1 2016  the abovementioned funds accumulated 57.2 bln drams, 29% of which or  17 bln drams are deposits in banks, 5% or 2.8 bln are invested in  bonds of corporate, mortgage and international organizations, 41% or  23.3 bln in state bonds, 25% or 14.1 bln in securities of foreign  investment funds (ETF - Exchanged traded funds, including stocks of  such companies as Apple, Google, Microsoft, Nestle, Toyota, Nissan,  Sony, Coca-Cola etc., as well as US state bonds and Gold mining fund  securities). HayPost, Araratbank, Ardshinbank, HSBC Bank (Armenia),  INECOBANK, Converse Bank, Armbusinessbank and VTB Bank (Armenia) are  pension account operators. Citizens can receive information about the  funds on their account via epension.am website, identification card,  as well as through ATMs of ArCa network.

To note, in November 2013 the Armenian Central Bank (CB) registered  the pension funds C-QUADRAT Ampega Asset Management Armenia and  Amundi-ACBA- Asset- Management.  The shareholders of Amundi- ACBA  Asset Management Armenia CJSC (registered by CB of Armenia on 19  November) are Amundi Asset Management with 51% shares and ACBA-Credit  Agricole Bank with 49% shares. French Amundi manages $5 trillion  assets. "C-QUADRAT Ampega Asset Management Armenia" received the CB  license on 29 November 2013. 74.9% shares of "C-QUADRAT Ampega Asset  Management Armenia" are owned by C- QUADRAT Investment and 25.1% by  German Talanx Asset Management GmbH. The group manages $130 bln  assets.

These companies offer three strategies of investment: fixed yield  pension fund (FIX), conservative pension fund (CON) and Balanced  pension fund (BAL). The customers are free to choose one of the given  strategies. In particular, the pension fund with sustainable income  implies investments of the 100% package of a customer in the debt  obligations with fixed yield (government bonds and deposits of highly  reliable banks) to avoid risks. The conservative fund implies  investment of 75% of a customer package in the debt obligations with  fixed yield and the remaining 25% in equity securities (shares).   Unlike the first two funds, the balanced fund implies equal  distribution of funds (50%/50%) in the debt obligations with fixed  yield and shares where a beneficiary must know about the risk  connected with fall of stock prices depending on the market condition  and the state of the emitter- company.

To recall, the compulsory accumulative pension system was introduced  in Armenia on January 1 2014 and applies to the citizens born after  Jan 1 1974. According to the new law on Accumulated pensions, the  minimal pension in the country will be equal to the minimum wage,  while the basic pension will total 150% of the minimum wage. Starting  Jan 1 2014, 5% of citizens' salaries have been transferred to their  personal accumulative accounts. The government will transfer a  similar amount (but no more than 25,000 drams). 

READ ALL COMMENTS

Vram Hakobyan
Barev dzez es stanum em carayoxakan toshak ev ashxatum em urish spum xndrum em indz pataaxanel indzanic petqe pahen partadir kutakayi te voch naxapes shnorhakalutyun.
Սմբատ
Բարև ձեզ, եթե ես ստանում եմ 70000դր. որքան է կազմելու պահումներ ։

POST A COMMENT
Input digits     


News
Armenia`s financial authorities continue loan market dedollarization Armenia`s financial authorities continue loan market dedollarization 
60 Armenian IT companies among Armenia`s 1,000 major taxpayers 60 Armenian IT companies among Armenia`s 1,000 major taxpayers 
Armenia`s minister of economy meets with BostonGene company reps Armenia`s minister of economy meets with BostonGene company reps 
Ameriabank leads Armenian mortgage marketAmeriabank leads Armenian mortgage market
Global Finance: Converse Bank is Armenia`s leading bank in Trade FinanceGlobal Finance: Converse Bank is Armenia`s leading bank in Trade Finance
Expert forecasts that growth of business activity in Armenian economy  to reach 7% this year Expert forecasts that growth of business activity in Armenian economy  to reach 7% this year 
Wizz Air to start operating flights to 4 new routesWizz Air to start operating flights to 4 new routes
ZCMC paid unprecedented taxes in 2022, exceeding the figure of the previous year by almost two and a half times.ZCMC paid unprecedented taxes in 2022, exceeding the figure of the previous year by almost two and a half times.
Armenian NPP comments on Azerbaijani Human Rights Commissioner`s call Armenian NPP comments on Azerbaijani Human Rights Commissioner`s call 
Armenia`s IT sector rapidly developing - reps Armenia`s IT sector rapidly developing - reps 
Armenia, Qatar discuss opportunities for investment cooperation Armenia, Qatar discuss opportunities for investment cooperation 
44,929 more officially registered jobs in Armenia as against last  year44,929 more officially registered jobs in Armenia as against last  year
Italian businesses interested in Armenia`s investment environment Italian businesses interested in Armenia`s investment environment 
Vahan Kerobyan raises Artsakh issue at Global Forum on Food and  Agriculture in BerlinVahan Kerobyan raises Artsakh issue at Global Forum on Food and  Agriculture in Berlin
Corporacion America  CEO expresses readiness to increase investments  in ArmeniaCorporacion America  CEO expresses readiness to increase investments  in Armenia
Loss ratio in CMPTL market decreased from 79% to 66% in 2022 Loss ratio in CMPTL market decreased from 79% to 66% in 2022 
Armenian banks record 3-fold growth in net profit in 2022Armenian banks record 3-fold growth in net profit in 2022
Expert: The development of the cryptosector in Armenia is the key to the involvement of new players, the growth of the tax base and jobs   Expert: The development of the cryptosector in Armenia is the key to the involvement of new players, the growth of the tax base and jobs  
901 transactions to amount of over AMD 56bln effected under economic  modernization programme in 2022901 transactions to amount of over AMD 56bln effected under economic  modernization programme in 2022
Armenia`s economy will not be able to withstand the expansion of  Turkish goods- EconomistArmenia`s economy will not be able to withstand the expansion of  Turkish goods- Economist
Armenia`s government to support hotels in Syunik, Vaiots DzorArmenia`s government to support hotels in Syunik, Vaiots Dzor
In Armenia, terms for removing arrest from citizens` accounts to be  reduced to 1-2 days from previous 7 days or moreIn Armenia, terms for removing arrest from citizens` accounts to be  reduced to 1-2 days from previous 7 days or more
Share of Armenia`s authorized capital in  EDB increased to 4.2291%,  while Russia`s stake in EDB decreased  to 44.7878%  Share of Armenia`s authorized capital in  EDB increased to 4.2291%,  while Russia`s stake in EDB decreased  to 44.7878%  
Armenia, Germany discuss number of issues on cooperation in economic  sectorArmenia, Germany discuss number of issues on cooperation in economic  sector
$350mln to invested in Zvartnots International Airport$350mln to invested in Zvartnots International Airport
Declaration of income: We have not achieved tax egalitarianism -  ExpertDeclaration of income: We have not achieved tax egalitarianism -  Expert
In Jan-Nov 2022, Armenian-Georgian trade turnover doubled compared to  2021, amounting to $759 million- PashinyanIn Jan-Nov 2022, Armenian-Georgian trade turnover doubled compared to  2021, amounting to $759 million- Pashinyan
Irakli Garibashvili announces about 70% increase in foreign trade  turnover with ArmeniaIrakli Garibashvili announces about 70% increase in foreign trade  turnover with Armenia
The beneficiary of The beneficiary of "The Power of One Dram" in January is the educational program "Talentum"
Fly Arna airline announces launch of new nonstop flights to Saint  PetersburgFly Arna airline announces launch of new nonstop flights to Saint  Petersburg
Vardan Aramyan: With the current quality and level of investments,  there is no need to talk about the growth of the economy`s potentialVardan Aramyan: With the current quality and level of investments,  there is no need to talk about the growth of the economy`s potential
Ministry of Economy of Armenia expects that ferry service to start  operating in Q1 2023Ministry of Economy of Armenia expects that ferry service to start  operating in Q1 2023
Armenia`s gross international reserves move down from historical highArmenia`s gross international reserves move down from historical high
Armenia`s tax revenues AMD 1,926bln in 2022Armenia`s tax revenues AMD 1,926bln in 2022
Robert Khachatryan: receiving station and satellite control center to  be put into operation during 2023Robert Khachatryan: receiving station and satellite control center to  be put into operation during 2023
Armenia extending restrictions on import of cement and clinkerArmenia extending restrictions on import of cement and clinker
New Year in Idram. results of 2022New Year in Idram. results of 2022
Ameriabank named Best Foreign Exchange Bank in Armenia by Global FinanceAmeriabank named Best Foreign Exchange Bank in Armenia by Global Finance
Economic growth in 2022 is not inclusive and leads to widening of  social gap - Luys FoundationEconomic growth in 2022 is not inclusive and leads to widening of  social gap - Luys Foundation
In 2022, social investments of Zangezur Copper-Molybdenum Plant  amounted to about 3.5 billion dramsIn 2022, social investments of Zangezur Copper-Molybdenum Plant  amounted to about 3.5 billion drams
Tariff for final consumers of electricity in Armenia will remain  unchanged in 2023Tariff for final consumers of electricity in Armenia will remain  unchanged in 2023
CBA to put into circulation new batch of 3rd generation thousandth  banknotes from January 23, 2023CBA to put into circulation new batch of 3rd generation thousandth  banknotes from January 23, 2023
Vahan Kerobyan: Unemployment rate in Armenia in 2023 will be below  10%Vahan Kerobyan: Unemployment rate in Armenia in 2023 will be below  10%
$56mln recovered to state budget in 2022$56mln recovered to state budget in 2022
CBA improves net private transfers forecast for 2022CBA improves net private transfers forecast for 2022
CBA improves unemployment forecast for 2022 CBA improves unemployment forecast for 2022 
RF Deputy Minister: financial institutions of Russia, Armenia are  expanding  network of correspondent relationsRF Deputy Minister: financial institutions of Russia, Armenia are  expanding  network of correspondent relations
Vahan Kerobyan: Number of labor migrants to reduce significantly next  yearVahan Kerobyan: Number of labor migrants to reduce significantly next  year
EDB analysts expect 12% growth in mutual trade in EAEU by end of 2022EDB analysts expect 12% growth in mutual trade in EAEU by end of 2022
Analyst: Global confrontation between West and Russia urgently  dictates the acceleration of integration processesAnalyst: Global confrontation between West and Russia urgently  dictates the acceleration of integration processes
Minister of Economy voices main risks to achieve economic growthMinister of Economy voices main risks to achieve economic growth
Final phase of ADB-financed bypass road program startsFinal phase of ADB-financed bypass road program starts
Deputy Prime Ministers of Armenia, Russia took part in solemn  ceremony of commemorative cancellation of stamp on establishment of  diplomatic relations between countriesDeputy Prime Ministers of Armenia, Russia took part in solemn  ceremony of commemorative cancellation of stamp on establishment of  diplomatic relations between countries
First stage of work under First stage of work under "Engineering City" program has been  successfully completed
Deadlines for submission of income declarations by individuals have  been changedDeadlines for submission of income declarations by individuals have  been changed
Armenia, Netherlands discuss new opportunities for cooperation in  technological fieldArmenia, Netherlands discuss new opportunities for cooperation in  technological field
Over 700,000 officially registered employees in Armenia Over 700,000 officially registered employees in Armenia 
Armenian Parliament elects CBA Deputy Governor and new member of CBA  Board Armenian Parliament elects CBA Deputy Governor and new member of CBA  Board 
IFC, Amundi-Acba Launch Partnership to Increase Investment in Armenia’s InfrastructureIFC, Amundi-Acba Launch Partnership to Increase Investment in Armenia’s Infrastructure
Structural reforms more urgent amid significant uncertainty – IMFStructural reforms more urgent amid significant uncertainty – IMF
Read more


Exchange rates
30.01.2023
RUB5.69-0.02
USD395.88-0.14
EUR431.870.60
GBP491.251.21
CAD297.25-0.15
JPY30.48-0.03
CNY58.540.05
CHF430.960.83