Compulsory pension component to be replaced by 5% social payment

At the session today, the Armenian government approved draft laws on amendments to the Administrative Court Proceedings Code and the Code of Administrative Offences, the press office of the government reported.

The draft law on amendments to the Administrative Court Proceedings Code was developed by a working group set up by the prime minister’s order on March 27, 2014, for the review of fines for frequent violations of traffic rules.

Prime Minister Hovik Abrahamyan said the legislative amendments were discussed by the appropriate bodies, and Armenian President Serzh Sargsyan assessed them yesterday.

“We make concessions: we reduce the fines by 50% and also propose that the new law take effect not on September 1, but immediately after its adoption,” the prime minister said.

At the session, draft amendments to some other laws, including the package of amendments and additions the Law on Accumulative Pensions, were also approved. The adoption of the package is conditioned by the decision of Armenia’s Constitutional Court of April 2, 2014. The system will be introduced for state sector employees on July 1, 2014, and on a voluntary basis and step by step within 3 years – for private sector employees.

The previous compulsory component of the accumulative pension system will not be in effect anymore. A target social payment to the state budget is introduced in the amount of 5% of wage rate. The maximum social payment shall not exceed 25,000 drams.

Hovik Abrahamyan said that from July 1, 2-14  salaries of about 200 thousand employees of the state sector will increase. “This fact is also a basis for a target social payment. It is a bold step of the government to allocate 38 billion drams for wage increase. Armenian citizens should be aware of this reality,” the prime minister said.