Ուրբաթ, հոկտեմբերի 24, 2014 Ժամանակը Երեւանում 16:43

in English

Uncertainty Lingers Over Pension Fund Payments

Armenia -- Billboard advertising the new pension reform in Yerevan, 20Jan2014Armenia -- Billboard advertising the new pension reform in Yerevan, 20Jan2014
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Armenia -- Billboard advertising the new pension reform in Yerevan, 20Jan2014
Armenia -- Billboard advertising the new pension reform in Yerevan, 20Jan2014

Armenian tax authorities have been accused of putting pressure on employers to comply with the new pension law despite last week’s decision by the Constitutional Court to suspend the controversial reform.

The Court, in particular, agreed that sanctions shall not be applied pending a ruling on an appeal lodged by Armenia’s leading opposition parties.

The law, which came into effect on January 1, requires Armenians born after 1973 to pay social security taxes equivalent to between 5 and 10 percent of their monthly wages in addition to contributions made by their employers.

The reform has sparked vehement objections from young and relatively well-paid professionals. Thousands of them as well as other disgruntled Armenians took to the streets of Yerevan earlier this month to protest against what they see as an unfair and unconstitutional measure.

The four parties that make up the parliament minority appealed to the court last month after failing to scuttle the passage of the bill by the National Assembly.

A number of recent media reports suggest that despite the suspension of the parts of the legislation implying penalties and sanctions for the failure to fulfill what is a mandatory provision some mostly state-run organizations still force their workers to switch to the system without waiting for the Constitutional Court’s ruling which is due in late March.

Members of the pressure group set up to campaign against mandatory pension fund payments also claim that the State Revenue Committee (SRC) is behind the coercion.

In a statement issued on Friday the civil initiative called Dem.am (I’m Against) urged Armenian employers to refrain from complying with the law in the interest of their workers.

“Don’t be part of an illegal deal that has been denounced by thousands of citizens, as well as the Ombudsman, the Chamber of Advocates, human rights NGOs and four parliamentary factions,” the group said.

The SRC had promised to provide clarifications, but did not do so despite repeated telephone calls made by RFE/RL’s Armenian service (Azatutyun.am).

Meanwhile, some accountants today have concerns about possible administrative responsibility if they do their work inaccurately while trying not to damage the interests of employees.

One of them, Lusine Vatian, who works for a Yerevan-based private digital technologies company, told RFE/RL’s Armenian service (Azatutyun.am) that with the use of a few “tricks” an accountant can still work without breaking any rules or orders and at the same time ensure that employees do not make payments to pension funds as long as no sanctions are applied.

Dem.am activist David Manoyan said their civil initiative is ready to assist any worker who experiences pressure in the matter of switching to the new pension system while sanctions for not doing so remain suspended.

“We advise that the bearers of feudal culture come to their senses and realize that they live in the 21st century and that the steps that were appropriate for that culture no longer have a place in this era. We will not let that happen,” the activist stressed.

The Armenian opposition believes they have a strong case for the law to be ruled unconstitutional. Government officials, meanwhile, have strongly supported the reform, describing it as the only alternative to the existing pension system based on the so-called ‘solidarity-between-generations’ principle.