Government Again Defends Pension Reform

The Armenian government ruled out on Tuesday any reversal or suspension of a controversial reform of the national pension system despite growing protests from mostly young workers affected by it.

Labor and Social Affairs Minister Artem Asatrian insisted that the reform is badly needed and will prove justified in the long run. “I consider this a very important decision for our country and people that will produce tangible results over the years,” he told a news conference.

Asatrian downplayed in that context Saturday’s opposition-backed demonstration against the reform which was attended by thousands of people. “I believe that our concerned citizens have the right to hear answers to their concerns, which is what we are trying to do with your help,” he said.

The weekend rally in Yerevan was by far the biggest street protest staged to date by opponents of the reform requiring Armenians born after 1973 to pay new social security taxes equivalent to between 5 and 10 percent of their wages. The unpopular measure stems from Armenia’s ongoing transition to a new and less egalitarian system of retirement benefits.

Asatrian reiterated government arguments that the transition began years before a controversial bill raising social security taxes took effect on January 1. “Claims that such a systemic reform is being carried out in haste are baseless,” he said.

The minister acknowledged that many employees aged 40 and younger will see their real monthly incomes drop as a result. But he claimed that many others working for private firms will be compensated by their employers in the form of wage increases.

The government says that the existing pension system based on so-called solidarity between generations is not sustainable because of Armenia’s aging population and other demographic problems.