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CONSTITUTIONAL COURT’S DECISION ON MANDATORY FUNDED PENSION SYSTEM IN ARMENIA

Gayan Simonian

It was a silent demonstration - no cries, no speeches.

“We don’t need to interrupt the Court. Posters are speaking for all of us”, announced the member of “I’m against”. 

he Mandatory Funded Pension System, which formally came into force in Armenia on January 1, 2014, irritated Armenian society. Monthly salaries of citizens born in and after 1974 will be deducted from 5 to 10 percent. The amount will be allocated to cumulative pension funds with a promise to later be reimbursed to the person once he/she turns 63 and becomes a pensioner.

The activists claimed that they conveyed their impartiality to the Constitutional Court in a unique, symbolic waynot disturbing the working process of the High Court. People hoped the Court would make an unbiased decision. They covered their eyes and were holding the posters with messages they wanted to pass to the court.

Due to the application of National Assembly members, the case of the Constitutional Court was postponed to March 31.

Four factions of National Assembly - the Armenian National Congress, Prosperous Armenia, Armenian Revolutionary Federation (ARF) Dashnaktsutyun, and Heritage party applied to the Constitutional Court demanding a series of articles of the Law to be recognized unconstitutional. The Court started the case on March 28. The process may last up to 3 months.

 

On March 31 the president of Constitutional Court of Armenia, Gagik Harutyunyan, announced that no final ruling on the constitutionality of the law on funded pensions would have been expected that day. 

“We have to study so many documents. We will meet when the Constitutional Court will be ready to issue a ruling,” he said. 

The Constitutional Court heard the arguments of the parties and went on discussion. CC was to issue a ruling on funded pensions on April 2.

The Constitutional Court (CC) considered some of the points of the law on Mandatory funded pension system as unconstitutional on April 2. However, the points will stay in force until September 30.

The statement implies that the deductions made from salaries must be returned to employees.

 

"September 30 2014, is the date by which the law contradicting Armenian Constitution will lose their effect, giving an opportunity to the Government and the RA National Assembly to have legal language of the law on mandatory pension comply with the requirements of this decision. All mandatory pension contributions made until then must be recalculated," said GagikHarutyunyan, the president of CC.

On this issue, Artak Zeinalyan, human rights activist, said the Constitutional Court fully satisfied applicants’ claim.

“The government must ensure practical application of the CC ruling. It has no right to impose any restrictions on people’s property right against their will. It cannot force employers to make transfers”, he said.

Armenian Revolutionary Federation (ARF) Dashnakstutyun parliamentary group member, Artsvik Minasyan, told that this ruling enables Armenian parliament harmonize the law with other laws. According to him that is a matter of principle as the government could claim that the law remains in force and continue deductions.

ARF Dashnaktsutyun member told that 4 forces of National Assembly - the Armenian National Congress, Prosperous Armenia, Armenian Revolutionary Federation (ARF) Dashnaktsutyun, and Heritage party who turned to the CC on this issue, now are going to demand from the government to order the State Revenue Committee to remove point on compulsory contributions.

“If the government continues acting illegally, we will continue our struggle with a new power in a new level. We have a very good chance now to carry out reforms in the country. The Constitutional Court has given this opportunity to us, and all those who want to see Armenia a social rule-of-law and democratic country, can take this opportunity,” he said.