The Armenian government has announced plans to seek legislative changes that will suspend the accrual of penalties over employers’ failure to make controversial mandatory pension contributions on behalf of their staffs until the law is amended in line with the requirements laid down in a recent Constitutional Court ruling.
Armenia’s newly appointed Prime Minister Hovik Abrahamian held consultations late on Thursday, reportedly instructing “the state bodies concerned” to draft amendments to the law to that effect. The government said the bill is likely to be submitted to the parliament for approval by April 28 when the 131-member body is due to gather for its next four-day session.
In its April 2 ruling the Constitutional Court of Armenia found a number of provisions of the Law on Funded Pensions to be unconstitutional and ordered that necessary amendments be made in it by September 30. Until then, it said, the provisions in question will remain valid.
This gave Armenia’s tax authorities the grounds to demand that employers make contributions on behalf of their workers until the end of September as mandated by the law that requires all citizens of Armenia born after 1973 to join the mandatory pension system and pay an additional five percent of their salaries to private funds before they retire at 63.
On the one hand, many employers in Armenia have found it hard to comply with the obligation considering opposition from their staffs who have cited another part of the Court ruling that admittedly allows them to choose whether to make such contributions or not. On the other hand, they have been worried by the prospect of incurring fines and penalties over their failure to make deductions and transfer the pension contributions of their employees to special accounts.
A local pressure group embracing mostly young professionals in high-paying jobs has opposed the enforcement of controversial provisions of the law, including the mandatory nature of pension contributions. Holding street protests and threatening to resort to “civil disobedience” members and supporters of the civic movement called Dem.am (I’m Against) have demanded that government agencies honor the Constitutional Court ruling and stop requiring that citizens make the payments.
The group intends to hold its next protest on Friday evening, gathering near the Presidential Palace in Yerevan and demanding that President Serzh Sarkisian act as guarantor of the Constitution and ensure that the executive complies with the Constitutional Court’s decision.