When approaching retirement, having a stable pension in place makes an enormous economic and psychological difference. Without that financial stability, however, it is easy for the elderly to fall into poverty. In Armenia, the risk of poverty is 1.2 times higher for households with two or more elderly people (over 60 years of age). This alarming trend, in which the elderly make up a large percentage of the country’s poor, prompted the government to start reforming the pension system.
The new system, which was launched in January 2014, in part with the assistance of the USAID-funded Pension Reform Implementation Program implemented by Chemonics, brought together previously separate parts into one integrated portal. Fully digital, it includes mandatory and voluntary contribution components in addition to the current pay-as-you-go government-funded component. Citizens can manage their pension assets through an online “My Pension Account” platform managed by Nasdaq OMX/Armenia. Now, citizens also have the option to diversify their sources of income from pension assets through private funds, a new concept in Armenia.
In addition, the Ministry of Labor and Social Affairs and the State Social Security Service, with support from the project, made significant changes in the pay-as-you-go government-funded pension pillar, which provides pensions to current pensioners. They connected comprehensive social services centers (CSSCs) in each district of Armenia with the e-pension system. This involved civil servants and project staff building new network infrastructure to fully integrate the country’s pension records.