YEREVAN, February 6. / ARKA /. At least 90% of money accumulated at pension funds should be channeled into development of public infrastructure through the issuance of long-term government bonds with reasonable return, an Armenian presidential candidate, former prime minister Hrant Bagratyan says.
According to preliminary estimates of NASDAQ OMX Armenia stock exchange, some $100-$150 million may be accumulated annually at pension funds.
In his election manifesto, Bagratyan says if elected president he will press for a sweeping revision of the funded pension system which the government is introducing stage by stage. He, particularly, would like to reduce three times the nominal capital requirement for pension funds managing companies.
According to the law “On Funded Pensions”, the minimum amount of a share capital of a pension fund managing company, determined by laws and the Central Bank may not be less than 500 million drams for companies managing mandatory pension funds and 200 million drams for companies manage voluntary pension funds.
“In 2008-2012, despite the much-trumpeted economic growth, we saw negative trends in the allocation of primary income. The average pension in 2012 was only 26% of the average wage (in 1996 the figure was 33%) “, he says in the manifesto.
Bagratyan promises to raise by 2017 the average pension to 38% of the average wage. According to official data, the average pension this year has increased by 3000 drams from 2012 to 31,500 drams.
The process of pension reform in Armenia started in January 2011 through the introduction of a voluntary funded pension system. Beginning from January 2014 the funded pension system will become mandatory for all workers born after January 1, 1974. ($1 – 405.79 drams). -0-
