Pension Reform: Constitutional Court to rule on legal status March 28

Politicians and experts objecting to the controversial pension reform are convinced that only a major civil rebellion is capable of forcing the Constitutional Court (CC) to recognize the new law on mandatory pension accumulation system as anti-constitutional.

Lawyer Norayr Norikyan says the law is applicable to around 240,000 citizens of Armenia and if 30 percent, i.e. 80,000 people, stand up and clearly state their civil standpoint on the issue, that circumstance “would have tangible impact on the philosophy of the adoption of that law”.

“The CC’s decision will be greatly conditioned by the manifestation of the interested parties’ and citizens’ will. In case of adequate pressure, the CC’s decision would be subject to that pressure,” says the lawyer.

On Friday, January 24, the CC partially suspended the application of the new law until the final decision on its constitutionality to be made on March 28. The country’s supreme court suspended the application of two articles in the law: first, providing for legal liability in case of not making the mandatory accumulative payments or being late with payments; second, stating that participants of the mandatory accumulative component are obliged to make their choice of savings fund type and savings fund manager by January 1 of 2014 following the order described in the law.

Oppositional Heritage party member Anahit Bakhshyan says the CC decision means nothing and that it is too early to rejoice. She recalls how in 2006 the CC declared anti-constitutional the property alienation for state
needs for the old houses where the current Northern Avenue stands.

“It changed nothing, people were displaced from their homes,” says Bakhshyan.

Lawyer Norikyan points out an article in the law by which if the total amount of payments a citizen fails to make equals 500,000 drams ($1,234) and more, the tax service is allowed to put a lien on his/her property.

“It is common knowledge that only a court has the right to put a lien on a citizen’s property, so now the tax service is given equal authority with courts, which is a major violation of Article 5 of the Constitution of Armenia,” says the lawyer.

Last Friday (hours after the CC decision), president Serzh Sargsyan spoke in support of the law for the second time, saying that by his strong conviction the reform would later be called historical. During the meeting at the Ministry of Labor and Social Affairs, the president said that the state had no right to delay the implementation of the reform and/or slow down its processes, hence urged the state bodies to keep presenting the essence of the reform to the public, substantially and clearly.

Members of the initiative protesting against the law believe that this statement by the president is direct pressure on the CC. Activists believe Sargsyan should have refrained from such statements at least during the judicial examination of the issue.