Wednesday, 6 July 2011
Pension Reform: Armenian Model of Saving Up Money
The voluntary stage of pension reform is underway: those financial institutions ready to make their appearance on the home pension market to manage the funds saved up by future pensioners have already been registered with the Ministry of Justice. They are expected to submit a package of services for the citizens shortly.
As noted by pension reform working group members, the Armenian model is a mix of best practices pursued elsewhere. It has been developed considering the so-called failures and shortcomings stated in other countries. Each working group member is convinced that our model is among the best ones, at least theoretically. Why? For it has not been tested in practice yet.
Note that a multi-stage system is being introduced in Armenia with the base pension rate placed at its heart. The base pension rate shall be administered to such persons as have never been employed and cannot have funded pension accounts. The base rate will be estimated considering the minimum bread basket applicable in the country at the moment of calculation. The voluntary and mandatory components are intended for active population. The voluntary component is due to be introduced this year, with the mandatory one scheduled for introduction in 2014. The latter affects those citizens born in and after 1974.
