YEREVAN (Arka)—Armenia’s Constitutional Court has suspended some provisions of a new, controversial law that aims to reform the country’s pension system. Judicial authorities announced on Friday that the Court is launching a detailed inquiry into the constitutionality of the law.
The highest court of the country has suspended Article 76 of the new law, which provides for penalties for failed or delayed pension tax payments, and the third paragraph of Article 86, which obligates employed citizens to choose a pension fund, among other parts of the law. The Court says it will conclude the inquiry on March 28, 2014.
The constitutionality of the law was challenged by three opposition parties in the National Assembly — the Armenian National Congress, the Armenian Revolutionary Federation, and the Heritage Party — along with the usually pro-government Prosperous Armenia Party.
The new pension system requires that all Armenian citizens born after 1973 pay social security taxes equivalent to 5 percent of their monthly wages, which will be matched and doubled by the government. That money has to be deposited with private pension funds licensed by the government late last December.
Armenia’s Central Bank was quick to respond to Friday’s decision of the Constitutional Court to suspend several provisions of the law.
Andranik Grigorian, a central bank senior official, said the decision would affect the international rating of the country’s financial market.
“We believe that the [pension] reform will continue, but if for some reason it does not, it will have very negative effects. Namely, it may adversely affect the financial credibility and rating of our country in the international market,” he told a press conference.