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Pension Reform Delay ‘Not Politically Motivated’


Armenia - Labor and Social Affairs Minister Artem Asatrian speaks during parliament debates in Yerevan on the Armenian government's controversial pension reform, 10May2016.

Armenia - Labor and Social Affairs Minister Artem Asatrian speaks during parliament debates in Yerevan on the Armenian government's controversial pension reform, 10May2016.

The Armenian government denied on Tuesday opposition claims that it wants to postpone the full entry into force of a controversial pension reform to avoid renewed street protests ahead of next year’s parliamentary elections.

The reform met with fierce resistance from many young Armenians when it was initially introduced in January 2014. It requires workers born after 1973 to earn most of their future pensions by contributing sums equivalent to at least 5 percent of their gross wages to private pension funds.

Responding to angry protests in Yerevan, the government made the new pension system initially mandatory only for 65,000 or so public sector employees. A law passed by the Armenian parliament allowed people working for private entities to opt out of it until July 2017.

The government now wants to extend that deadline to July 2018 through corresponding legal amendments. It claims that the reform cannot be fully implemented before the planned passage of a new Tax Code expected at the end of 2017.

Lawmakers critical of the reform dismissed the official explanation at the start of parliamentary debates on the proposed amendments. “What is the Tax Code to do with that?” said Edmon Marukian, an independent deputy.

“When you were passing the pension reform bill didn’t you think of tax legislation? Why did you hastily pass it at the time?” Marukian asked Labor and Social Affairs Minister Artem Asatrian on the parliament floor.

Levon Zurabian, the parliamentary leader of the opposition Armenian National Congress (HAK) also alleged political motives behind the proposed delay. “In reality, we all know that you too realize the impossibility of enforcing such mandatory payments in the severe socioeconomic situation existing in Armenia,” he said. “You too realize what a big wave of protests it would generate and acknowledge with this move that it cannot be digested.”

Asatrian flatly denied that. “There is no such connection whatsoever,” he said during the parliament debates on the issue.

Armenia is due to hold the next parliamentary elections in April or May 2017. The vote will determine who will govern it after President Serzh Sarkisian ends his second and final term in April 2018. The Armenian authorities will complete the country’s transition to the parliamentary system of government by that time.

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