Several provisions of Law on Pensions declared unconstitutional

The Constitutional Court of Armenia (CC) has recognized as unconstitutional a number of provisions of the Law on Compulsory Accumulative Pension System.

The law took effect on January 1, 2014. It applies to Armenian citizens born after January 1, 1974. Under the law, employees have to pay 5% of their monthly salaries to a pension fund, and the state will pay another 5%, but no more than 25,000 drams ($61).
The CC Chairman Gagik Harutyunian read the court decision saying that the use of the compulsory component restricts the application of a number of articles of the Armenian Constitution, in particular, the protection of the right of property. Besides, the law does not take into account the requirements to ensure the minimum consumer basket.

The decision takes effect upon its publication.

The Constitutional Court of Armenia ruled that the Armenian parliament and the government shall bring the law into line with the decision’s requirements by September 30, 2014.

The new pension system caused discontent of most Armenian citizens. “I am against’ civil movement staged numerous protests. The movement was supported by four parliamentary factions – ARFD, Armenian National Congress (HAK), Prosperous Armenia Party (BHK), and Heritage factions, which asked the Constitutional Court to declare the law unconstitutional.

On January 24 the Constitutional Court temporarily suspended the law’s Article 76 and Article 86 related to the responsibility for not paying 5% contributions to pension funds and the choice of a pension fund.