YEREVAN—Armenia’s Minister of Labor and Social Welfare Mane Tandilyan on Tuesday tendered her resignation in protest of a government decision to pursue a controversial pension system that met with street protests in 2014 when the previous regime introduced it.
Tandilyan, who was one of the leaders of the 2014 protests, had recommended postponing the implementation of the mandatory component of the pension reform, which requires those born after 1973 to invest five percent of their income in private pension fund that would manage the amounts until the person reached retirement age. This aspect would affect some 270,00 citizens, 200,000 of whom have already enrolled in the program.
Tandilyan, who is a member of the Bright Armenia party and part of Prime Minister Nikol Pashinyan’s Yelk Alliance, was recommending the one-year moratorium to find better solutions through public discussions.
In a Facebook Live session on Tuesday, Pashinyan said that the government had to act on the matter given the looming deadline, adding that it would be unfair to those already enrolled in the program if the government deferred enacting the reforms.
The government’s decision on Monday also led to verbal sparring between Pashinyan and Armenia’s Minister of Economic Development Arstvik Minasyn, a member of the Armenian Revolutionary Federation.
“During yesterday’s [Monday’s] Cabinet meeting the issue of full implementation of the Mandatory Funded Pension System was discussed. You know my position that I expressed years ago on the ‘mandatory’ component of system,” said Tandilyan in explaining her decision to resign in a Facebook post.
“When I was appointed Minister of Labor and Social Welfare, I expressed my position on suspending the full implementation of the ‘mandatory’ component by a year and to amend the system after public debates that would create different, more attractive solutions for the beneficiaries. This path also had some complications, but I have expressed readiness to initiate that work and to carry out large-scale works with the public to find the best solution acceptable for the public,” added Tandilyan.
“This issue is of paramount importance to me. The ‘mandatory’ component of had, and continues to have, no public support, and its reasons are numerous. It has social, legal, political and systematic problems and I see no way for fully implementing that component without discussing it with the public, identifying the problems and finding mutual and acceptable solutions. I hoped that the new Government would take a new path of solving this issue. The overbearing methods of solving issues that are characteristic of the previous regime are not acceptable to me,” explained Tandilyan, who also announced on Facebook that she would be leaving the Bright Armenia party.
Tandilyan pledged that she would continue her fight against this system, which was introduced by the previous government, but was met with obstacles, including a Constitutional Court ruling , which suspended the mandatory component until July 2018.
Pashinyan, himself, was also opposed to the new system, which invests employee contributions in private funds, a practice that proved detrimental in the United States during the economic crisis when many lost their pensions due to the fluctuating financial markets.
Leaders of “Dem Em—I am opposed,” a group that led demonstrations against the system in 2014 has warned of fresh protests against the current government if the measure is implemented.
Monday’s controversial decision to implement, in full, the pension reform, made for a heated cabinet meeting during which economic development minister Minasyan’s opposition to the measure resulted in a verbally argument with Pashinyan, who defended the reforms but introduced a concession that slashed the five percent mandatory personal contribution by half.
“I am against this mandatory pension system, while realizing that today’s solution is a forced one,” Minasyan told Pashinyan adding that “I don’t want to criticize the decision which is being made.”
A visibly irritated Pashinyan shot back by stressing his government’s motto of taking “collective responsibility” for cabinet decisions.
“Those who don’t shoulder this responsibility are not with us,” Pashinyan tersely warned Minasyan. “I want us to make this clear.”
Minasyan assured Pashinyan that he would comply with any decision made by his fellow cabinet members. But Pashinyan continued his verbal attack on Minasyan by saying: “It could not be otherwise; therefore you are not doing anyone any favors.”