Constitutional Court Starts Hearing Opposition Case Against Pension Reform

The Constitutional Court in Armenia on Friday began hearing the opposition claim on the legality of an unpopular pension reform that has provoked street protests in the country recently.

Four leading opposition or opposition-leaning parties, including the Armenian National Congress, the Armenian Revolutionary Federation (Dashnaktsutuyn), Heritage and Prosperous Armenia, dispute several provisions of the pension law that came into effect in January amid protests from mostly young professionals in high-paying jobs considering it unfair and unconstitutional.

The protests gained momentum since then, gathering thousands of citizens for rallies and demonstrations in the Armenian capital, Yerevan.

Under several provisions of the law, all working citizens in Armenia born after 1973 must pay five to ten percent of their salaries to private pension funds in addition to other social security payments made by their employers. They will be able to use their accumulated funds when they reach retirement age, which is set at 63 for both men and women in Armenia.

The opposition has built its case around the alleged unconstitutionality of the mandatory nature of some of the provisions of the law.

Stating the case at today’s hearing Dashnaktsutyun lawmaker Artsvik Minasian, in particular, emphasized that the reform is being carried out against the will of an overwhelming majority of citizens and does not provide guarantees for people’s well-being.

The Armenian government admits that most citizens of the country are opposed to the law, but officials believe any reform that is good in the long term is taken painfully at first. Recent opinion polls conducted in Armenia also show that nearly 90 percent of Armenian citizens do not accept the reform.

“Measures adopted under pressure do not have a long life,” Minasian warned in the court.

The plaintiffs insisted that the law will result in the worsening of the economic situation of a great number of citizens and the country in general. In particular, they predicted that if the law is enforced economic growth in Armenia will slow down, the government debt will increase and the level of poverty will rise.

Minasian cited the data of the National Statistical Service, according to which more than 23 percent of hired workers in Armenia are considered to be poor and about 2 percent are considered to live in extreme poverty. “Deductions from the salaries of these people will certainly reduce their consumption, making them even poorer,” the lawmaker stressed.

Making references to international experience, the plaintiffs sought to show that the funded pension system is risky for Armenia and will become a burden for the state.

Among the major arguments of the plaintiffs is also that the law allegedly violates the right of ownership as citizens cannot use their accumulated funds before they reach retirement age or meet some other conditions, including giving up their Armenian citizenship.

Legal representatives of the government, meanwhile, presented counterarguments, trying to show that provisions of the law are consistent with the Constitution.

The Court hearing was adjourned until Monday.

Meanwhile, some of the members and supporters of a pressure group campaigning against the reform staged a silent demonstration outside the court building. In a statement issued earlier the movement calling itself Dem.am explained that they did not want to interfere with the course of justice with their ‘noisy’ actions, but, at the same time, expected the Constitutional Court to make a decision that would reflect the letter and spirit of the basic law.

Meanwhile, at least one parliamentary opposition party, Heritage, led by Raffi Hovannisian, staged a rally in central Yerevan late on Friday. The timing of the gathering had apparently been selected to coincide with the opening of Constitutional Court hearings on the pension reform claim.

Hovannisian, who was the main opposition candidate challenging President Serzh Sarkisian in last year’s elections, last week called on the activists to join his March 28 rally. But Dem.am made it clear that they would not take part in it as a civic group, while members as citizens were free to attend.

Speakers at the Heritage-organized rally, meanwhile, did not focus much on the pension reform in their speeches.