JUNE 17 2014 (The Conway Bulletin) – The thorny issue of pension reform returned to centre stage in Armenia after the new government submitted a proposal that watered down unpopular reforms.
Earlier this year Armenia’s government resigned over the unpopularity of its changes to the pension system which came into effect on Jan. 1. The new law stated that people born after 1973 pay 5% of their salaries into a government scheme, a sum matched by the government.
Thousands of people demonstrated against this plan and the Constitutional Court eventually deemed it illegal and demanded that the new law was amended by Sept. 30.
Armenia was effectively plunged into a political crisis — and the issue of how to reform the out-of-date pension system was still unresolved.
Now the new government of Hovik Abrahamyan is trying to tackle the problem.
It has proposed that the scheme would only be obligatory for public servants who will also have their salaries raised from July 1. It’s a brave proposal and one that may gain traction. Like other states across the former Soviet Union, Armenia needs to reform its overly-generous state pension scheme and also avoid major public discontent.
ENDS
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(News report from Issue No. 189, published on June 18 2014)