Armenia's new pension law clauses ruled unconstitutional

 April 2, 2014 - 13:57 AMT

PanARMENIAN.Net - Armenia's Constitutional Court has declared controversial clauses to the law on cumulative pensions invalid.

According to Panorama.am, at a hearing on Wednesday, April 2 the court ruled that all provisions imposing mandatory cumulative pension system are at conflict with the country's basic law.

The court decision noted that the law fails to indicate requirements for those with minimum salaries of AMD 45000, with every citizen entitled to a salary no lower than a minimum one.

According to the Constitutional Court, the government and parliament must protect the citizens’ right to ownership.

The disputed provisions, which went into effect on January 1, obligated all employed citizens under 40 to allocate 5% of their monthly salaries to cumulative accounts, with the government to add another 5%.

Armenia’s leading opposition parties challenged the legality of the law at the Constitutional Court. On February 4, Armenian parliament voted down suggestion of a year-long delay for introduction of a mandatory cumulative pension law, with 46 votes in favor and 56 against. he suggestion was initiated by the Prosperous Armenia, Armenian National Congress, Heritage and ARFD parliamentary groups.

On January 24, the Constitutional Court suspended the provisions of the law envisaging sanctions for not complying with it at least until March 28 when it is due to proceed with consideration of the matter.

Government agencies, however, have continued to force employers to make deductions from the salaries in favor of the funds, which activists and non-government political forces insisted was contempt of the Court’s decision.