YEREVAN, November 28. /ARKA/. Funded pension system in Armenia has no alternative, Armenia’s Prime Minister Tigran Sargsyan said Wednesday.

“If we look at the demographic situation, we will see that the burden over employees is growing year over year. If this tendency continues, there will be three pensioners per one employee ratio in the near future,” Sargsyan said at the second annual pension conference.

This fact can raise a number of obstacles for economic growth in the future, as creating new jobs will become economically irrational, according to him.

The head of Armenia’s government also noted many countries, including the developed ones, are challenged by pension distribution issue as the population is getting older.

“The existing pension system implies that the social charges added to the budget will be distributed to retirees thus loading the current generation with this burden. In other words, the welfare of pensioners will depend not on their career biography, work experience, work nature, etc., but on a country’s economic situation,” PM added.

Sargsyan noted the pension system reform will be really tangible for the citizens within the next two-three years, as they will have to “change their behavior and mentality.”

“It is necessary to raise public awareness about the nature and mechanisms of the new system. We have set a center for raising public awareness about all the reforms and events related to the funded pension system. Our research shows we have reported good results here, but it is still not enough,” PM resumed.

Pension reforms were kicked off in Armenia on January 1, 2011, by embedding voluntarily funded pension system. Mandatory funded pension system is expected to be introduced in the republic on January 1, 2014, and will refer to all the citizens born after January 1, 1974.

Due to the funded pension system retirees will be able to collect their pension amount. All workers, the self-employed and villagers of up to 40 years old will be able withdraw 5 % of their salary for the pension fund, another 5%, but not over 25,000 drams (300,000 for entrepreneurs), will be contributed by the state. ($1 – 406.32 drams).—0—