USAID: defined contribution retirement scheme to help Armenia avoid crises

YEREVAN, July 11. /ARKA/. Accumulative pension system (defined contribution retirement scheme) in Armenia will make it possible to avoid crises caused by insufficient budget funds, Rosa Chiappe, chief of the Pension and Labor Market Reform Project of the USAID, said Wednesday at a USAID-organized seminar focused on pension system reformation in Armenia, which was held at Armenia’s youth and sports ministry. 

Vahe Eloyan, the head of the ministry’s administration, on his side, stressed the importance of reforms in the country and the necessity to enhance public awareness of the new pension system. 

The pension system reformation was launched in Armenia on January 1, 2011. The obligatory accumulative pension system is planned to be introduced in the country in January 2014. The system targets all those citizens born later than Jan 1, 1974. 

The accumulated funds will enable future retirees to shape the size of their pensions at own discretion. 

A new pension system whereby the amount of monthly benefits paid to retired citizens will depend on their and their employers’ lifelong contributions to the pension fund. The existing pay-as-you-go system essentially does not differentiate between pensioners’ employment histories. 

People will send to their accumulative pension account 5% of their salaries every month, and another 5%, but no more than AMD 25,000, will be added by the government. M.V.-0--