Паст инфо

-Who should a person turn to in order to receive a mandatory funded pension and how should he/she register?

Artak Ghazaryan
Founding Director of ‘Pension System Awareness Center’ answers the questions of “Pastinfo”

- When a person turns 63, first of all he/she must present a filled out application to the regional department of social security for calculating his/her basic pension, then he/she needs to apply for a mandatory funded pension to the manger of the participants registry – RA Central Depository - to find out his/her individual pension account funds rate. According to the size of the accumulated amount the participant makes a choice on how to get the mandatory funded pension. Funded pension may be paid in the following forms: lump sum, programmed withdrawals and/or annuities.

- What will happen to the mandatory funded savings if a person looses his/her job?

-If a person is a participant of the mandatory funded component and made all the contributory payments during his/her working years, then, in case a person loses his/her job, both his/her savings and the taxes paid for him/her by the government continue to be accumulated on his/her individual pension account and they are managed by the Head of the Pension Fund. The amount on the individual pension account will remain unchanged unless the person starts working. And as the amount on the account remains the same in different financial instruments, the income received from the amount management is the only source of pension account balance increase. After the person starts working the cumulative payments resume.     

- Does a person have the right to receive a mandatory funded pension if he/she loses his/her job before the retirement age?

- Definitely no. The fact that a person loses his/her job before the retirement age does not provide sufficient legal basis for receiving the already accumulated amount. It should be clearly understood that the money accumulated over the years should provide the person with certain income after the retirement when it is supposed that the person will not be able to work and will not have any other sources of income. So, no matter when a person stops working, he/she may apply to receive the accumulated amount only after he/she turns 63.

- Will the person receive his/her mandatory funded pension in case he/she currently or permanently lives abroad?

-Sure. The fact that the person currently or permanently lives outside the country cannot cause the termination of the funded pension payment. The person will receive his/her mandatory funded pension regardless the fact that physically he/she is not in the country. He/she might choose one of the options: either to authorize another person who lives in Armenia to receive the mandatory funded pension or to inform the manager of the participant’s registry, the insurance company, the bank account number, to which the mandatory funded pension will be transferred on monthly basis.