Pension reform may lead to unemployment increase in Armenia
Law "On Funded Pensions" in Armenia envisages sanctions for employers if they fail to transfer funds to pension funds and penalties will be the same as non-payment of taxes, the chairman of the Republican Union of Employers of Armenia, Gagik Makaryan said at a press conference, Armenia Today reported on Feb.19
"In accordance with the provisions of the above law, in the case of non-payment of funds to pension funds, property and accounts of the employer will be seized in the amount of the unpaid amount, after which the property in the specified amount will be confiscated," he said. "The same procedure is followed in the case of non-payment of taxes."
"In other words, taxes and pension payments are actually equated," Makaryan said, considering it unacceptable.
Similiar enforcement mechanisms, he said, are unacceptable not only because it creates tension between employer and employee, but also in the long term it can reduce the number of registered workers and consequently lead to higher unemployment. The chairman stressed that there are already recorded cases, at the insistence of the workers not to be registered in order to have the opportunity to get paid in full.
Makaryan also pointed out that regarding the law, there is great uncertainty and a high level of tension. If the Constitution Court rules in March that the law is consistent with the Constitution of the country, the process will not end, according to his estimates. On the contrary, given the level of discontent and indignation, protest may take a more assertive form.
Translated by S.I.
Edited by C.N