Ministers say mandatory pension law will stay in force

April 3, 2014 - 16:15 AMT

PanARMENIAN.Net - The provisions of the mandatory cumulative pension law declared unconstitutional will remain in effect until September 30, a member of the Constitutional Court has said, commenting on the top court’s Wednesday, April 2 ruling.

The statement implies that the employed population aged under 40 will have to make the mandatory contributions to the pension funds until the specified period.

“The Constitutional Court didn’t declare the whole mandatory accumulation system is unconstitutional. What we have said is that the model submitted contains anti-constitutional provisions which must be revised by competent authorities – the government and the National Assembly,” Felix Tokhyan said in an interview with the local TV channel Shant, according to Tert.am.

Armenia's Constitutional Court declared controversial clauses to the law on cumulative pensions invalid on April 2.

At a hearing on Wednesday, the court ruled that provisions imposing mandatory cumulative pension system are at conflict with the country's basic law.

The court decision noted that the law fails to indicate requirements for those with minimum salaries of AMD 45000, with every citizen entitled to a salary no lower than a minimum one.

According to the Constitutional Court, the government and parliament must protect the citizens’ right to ownership.

The disputed provisions, which went into effect on January 1, obligated all employed citizens under 40 to allocate 5% of their monthly salaries to cumulative accounts, with the government to add another 5%.

Armenia’s leading opposition parties challenged the legality of the law at the Constitutional Court. On February 4, Armenian parliament voted down suggestion of a year-long delay for introduction of a mandatory cumulative pension law, with 46 votes in favor and 56 against. he suggestion was initiated by the Prosperous Armenia, Armenian National Congress, Heritage and ARFD parliamentary groups.

On January 24, the Constitutional Court suspended the provisions of the law envisaging sanctions for not complying with it at least until March 28 when it is due to proceed with consideration of the matter.

Government agencies, however, have continued to force employers to make deductions from the salaries in favor of the funds, which activists and non-government political forces insisted was contempt of the Court’s decision.

As human rights activist Artak Zeynalyan told PanARMENIAN.Net commenting on Tokhyan’s statement, in his remarks aired over ArmNews channel, the court member also noted that the cumulative pension can’t be deducted from a person’s salary without the latter’s agreement, with the step to be construed as a violation of human rights.

The law on mandatory cumulative pensions will stay in effect until September 30, Prime Minister Tigran Sargsyan said at the April 3 government session.

“The law, which came into force on January 1, will stay in effect until relevant amendments are introduced, with citizens and business entities as well to be guided by the law,” the prime minister said.

As he noted, a working group involving all departments in charge will be set up. A legislative package taking into account all the norms indicated by the Constitutional Court will be submitted to the parliament.

Sargsyan also called on all civil activists to cooperate in the development of a new package. “We expect a dialog,” he said.

“Failing to observe any of the provisions of the law will entail consequences, Minister of Justice Hrayr Tovmasyan told reporters on Thursday.

“When the law on the Constitutional Court was adopted in 2006, it envisaged a number of procedures for the enforcement of its rulings. According to Point 15 of Article 68 of the law on Constitutional Court, a law ruled unconstitutional becomes invalid during a later period, with the provisions to remain valid till September 30” the minister said.

According to Tovmasyan, the Constitutional Court’s ruling will actually facilitate long-term progress in Armenia’s social security system, Tert.am reported.