Pension fund bankruptcy risks brought down to zero in Armenia – Central Bank

31.03.2014 18:30
Pension fund bankruptcy risks brought down to zero in Armenia – Central Bank

YEREVAN, March 31. /ARKA/. Pension fund bankruptcy risks are minimized to zero, deputy head of the Central Bank of Armenia Nerses Yeritsyan said at a Constitution Court hearing on the funded pension scheme payments Monday.

Operational are also at zero, he said. The risks are balanced and price fluctuations are the only factor that may have substantial impact on them, Yeritsyan said.

The pension funds are managed by two companies - AMUNDI-ACBA ASSET MANAGEMENT and C-QUADRAT AMPEGA ASSET MANAGEMENT.

The dollar/dram proportion in deposits will be 40/60 to ensure protection from forex fluctuations. Dollar deposits do not necessarily mean placing them abroad, Yeritsyan said.

The new pension system requires that all Armenian citizens born after 1973 pay social security taxes equivalent to 5 percent of their monthly wages. As much is to be allocated by the government. That money has to be deposited with private pension funds licensed by the government.

On January 24 Armenia’s Constitutional Court suspended Article 76 of the new pension law, which provides for penalties for failed or delayed pension tax payments, and the third paragraph of Article 86, which obligates employed citizens to choose a pension fund, among other parts of the law.

The constitutionality of the law was challenged by three opposition parties in the National Assembly — the Armenian National Congress, the Armenian Revolutionary Federation, and the Heritage Party — along with the usually pro-government Prosperous Armenia Party.

According to a poll by Gallup International Association, over 88% of some 1,066 respondents in Yerevan have not supported the new funded pension scheme.–0--

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