Monday, July 2 2018 12:04

ArmInfo.In Armenia, from July 1, 2017, the wages of 207,000 employees will increase. This July 1, in  an interview with journalists, said Armenian Prime Minister Nikol Pashinyan, answering the question when "there will be noticeable improvements in the economic situation of the citizens of the country."

According to the prime minister, certain changes in the economic  status of citizens already exist, "naturally they are not so far not  very noticeable." In this context, the head of government indicated  an increase in the wages of 207,000 workers in the context of  lowering the threshold for a compulsory funded pension system for  citizens. "In addition, there was a certain price change at the fairs  in the direction of their reduction, at a high enough level there is  both the collection of tax revenues of the budget and the  effectiveness of measures to combat corruption manifestations.As a  result, today the state treasury received additional tens of millions  of AMD. The healthcare system is also experiencing qualitative  changes, the activity in the construction of housing of social  significance is felt, I know people are waiting for quick results,  and we are doing everything possible for this, " he stressed.

From July 1, 2018, the accumulative pension system became mandatory  for all Armenian citizens born after January 1, 1974. At the same  time, starting from July 1, along with the entry into force of the  mandatory component of the funded pension, Armenia revised the  monthly payments for them: the monthly mandatory payments from July 1  will be 2.5% of the salary (on the part of the working citizen)  instead of the early 5% . The state will contribute 7.5% to the  savings account of the system participant, but not more than 37,500  thousand drams, and 450,000 thousand drams for the self-employed  persons, against the early 5%, 25 thousand drams, and 300 thousand  drams, drams, respectively. This means that 207,000 citizens will pay  for MFSP two times less. "Initiative" will cost the budget 12-15  billion drams, plus those 43 billion drams, which have already been  approved by the state budget for 2018. The decision is temporary,  according to official statements, until the government revises the  income tax rates, which should be lowered (plans to revise income tax  rates from 23%, 28% and 35% to 20% and 25%, respectively). After  this, it is possible that the government will return to the former  conditions of the MFSP.

Thus, it turns out that, albeit indirectly, the Armenian government  temporarily raised the salary of some 200,000 hired workers in the  country by about 5,000 drams. Simultaneously, the salary of 50-70  thousand compatriots, who only connect to the funded pension system,  will decrease by the same amount.

The multi-step accumulative pension system - mandatory for persons  born after January 1, 1974, was introduced in Armenia from January 1,  2014 (for citizens born before January 1, 1974, there is a  distribution pension system). According to the RA Law 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.  As of today, about 200,000 people have become members of  the system. Since July 1, 2018, another 50-80 thousand beneficiaries  are to join it. A total of 120 billion drams have been accumulated in  management companies, 70% of which have been invested in the economy  of the country: state bonds, mortgage bonds and bank debt securities,  generally aimed at hedging risks for pensioners. The average yield of  these securities in 2017 was 12.8%.

Meanwhile, on June 21, Labor and Social Affairs Minister Mane  Tandilyan assured that within the next 2 months a new bill on the  funded pension system will be submitted - the document will provide  for a voluntary component. Following the results of discussions with  the public in the fall, the bill will be submitted to the parliament.  As early as January 1, 2019, the new law is expected to be put into  effect.