The Armenian government today convened an extraordinary sitting, the agenda of which contains a draft law "On Amending the RA Law on Accumulative Pensions", which will be submitted to the parliament after its adoption.

Particularly, the mandatory component will come into force on July 1, but the discussions will continue. According to the project's justification, the Law on Accumulative Pensions has been improved since the adoption of a number of changes which were resulted by the problems and solutions raised by the public. Among those changes, it is important to underline the positions of the RA Constitutional Court's decision.

According to the substantiation, the pension system participant accumulates 10% of its income, 5% pays the person, 5% - the state in favor of the person. This is an additional burden for both the system member and newcomers, which is the main concern of the public. The same 10% of the proposed project will be formed as follows: 2.5% - citizens, 7.5% - the state.

For example, in case of salary of 200 000 AMD, the person makes 10 000 drams of social payment and the state, in its turn, adds another 10 000 drams. According to the bill, the person will pay 5,000 drams (2,5%) and the state - 15,000 (7,5%). These rates will operate till the income tax reform comes into effect, which will reduce the payable income tax, also reducing the burden on social payments for the system participants. Thus, the mandatory accumulative component will come into force from July 1, 2018.

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