YEREVAN, February 10./ARKA/. Citizens’ confidence in the new pension system will emerge no later than in one year and six months, Armenian Finance Minister David Sargsyan told journalists on Friday in Tsakhkadzor, where a conference focused on the country’s capital market was held.

“In six months, when our citizens put their bank cards in ATMs to see their salaries, they’ll also see another button for looking through their pension account,” he said. “And when people see the money they transferred to their pension accounts and the money added by the government and when they see the interests appearing here, this confidence will emerge.”

The minister said things were similar when obligatory car insurance was introduced in the country on January 1, 2011 – people were opposed to the system. However, in three or four months, when first insurance payments were made, car owners understood what it was.

He proved his words by saying that 76% of the population found the introduction of the mandatory car insurance one of the most successful reforms in the last six years.

Sargsyan doesn’t find the information provided on the new pension system in Armenia poor.
“We have distributed dozens of thousands of booklets containing 63 of most frequent questions, several hundreds of meetings between employers and employees have been held and we have set up several groups, which were providing appropriate information to various-scale companies throughout seven or eight months.”

Commenting on the public backlash over the new system, the minister said that people don’t want to accumulate money today to have pensions from the accumulated money upon reaching the age of 63, but they want to spend money now.

Under the reform plan approved by the government years ago, Armenia was to switch to the new system in January 2010 whereby the amount of monthly benefits paid to retired citizens will depend on their and their employers’ contributions to the fund. 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. The existing pay-as-you-go system essentially does not differentiate between pensioners’ employment histories.

The government's decision triggered backlash in the country. Protests are being staged in Yerevan. On January 24, the Armenian Constitutional Court suspended the enforcement of the pension system and is now considering the matter. -0---