Armenia to switch to new national pension system in january, 2011

YEREVAN, October 27, /ARKA/. Vazgen Khachikian, head of the State Social Security Service (Pension Fund), said Monday Armenia will switch to a new national pension system in January, 2011.

Armenia planned to switch to new, so-called ‘accumulative’ system in January, 2010. Under the new system, the amount of monthly benefits paid to retired citizens, will depend on their and their employers’ contributions to the Fund.

Speaking to a news conference Monday, Vazgen Khachikian said the delay was caused by continuing economic crisis and besides the relating legislation needs still some improvement. He said passage to the new system will require ‘political courage’ on part of the authorities, but added that without this sweeping reform the government would not be able to secure pensioners’ social security in future.

One of the reasons, he said, that pushes the government to pass to a new pension system is the demographic factor with growing number of retired citizens and dwindling number of able bodied work force.

According to official figures, there are about 520,000 retired citizens and 460,000 registered work force. “For normal functioning of the pensions distribution system we need to have three workers per one retired citizen,’ he said.

The average monthly pension in Armenia has grown over the past decade to 26,000 drams ($68). Khachikian assured also that pensions will not be slashed, neither delayed next year. M.M. -0-