In my opinion, the Constitutional Court, in its decision on the Law on Funded Pensions, recorded three important facts: a/ the law breaches the right to inviolability of private property: my salary (after paying the taxes) is my property, no one has the right, contrary to my will, to take part of it away from me, b/ in the law, a lot of things are left to the discretion of the government and the Central Bank, which is likely to lead to arbitrariness and abuses, c/ there are unclear legal definition, which again pave a way for a variety of frauds. (In fact, interestingly, whether b/ and c/ drawbacks do not exist in many other laws).
Therewith the positive ends, and political intrigues, founded and unfounded suspicions and assumptions begin. For example, I assume the following: since the government, as to speak, is “in terribly need” for this money (also to get a loan from the international organization), in these months the law will undergo amendment that the name “funded” will be called a “tax”, basically, adding the tax burden over the property owners and employees, and thus also after September 30, the money, anyway, will be withdrawn. Perhaps, not just from those born after the year 1974, but from all of us.
Funded pension, itself, seems to me, is a good idea, simply the society should assimilate into it and understand the benefits of it. When truly substantial guarantees are created to ensure the risks, as well as the requirements for managing funds are tightened up (which is also included in the decision of the Constitutional Court), I, for example, am inclined to refer to the voluntary funded scheme. Especially, since I can imagine my future 9 years of life before the retirement age, unlike, for example, a 20-year-old person who is unlikely to be able to plan his next 43 years of life.
In all cases, funded should be voluntary in Armenia with quite serious promotional work, guarantees, and the interest of employers. However, I highly doubt that the Government terribly needs these pension reforms at the moment. It is more logical to assume that the government urgently needs money to raise salaries and to pay current pensions.
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Anyway, in the end, let’s again go back to the positive. The fact that the Constitutional Court decided not to “ratify” the draft of the Government, and, perhaps because of the political situation, it did a number of correct statements, is already an achievement.
ARAM ABRAHAMYAN
