Friday, 18 March 2005
Today the RA State Social Insurance Fund Board of Trustees has held a meeting at the Fund headquarters under the chairmanship of RA Prime Minister A. Margaryan, Chairman of the Board. The Board has discussed and approved the 2004 fourth quarter and end-of-year summary report on compulsory social insurance budget receipts and expenditure, the proposed structure of the Fund's central administrative apparatus, the step-by-step introduction of a non-cash basis of pension settlement and other topical issues.
With reference to agenda item one, President of State Social Insurance Fund Vazgen Khachikyan reported that compulsory social insurance budget receipts rose to 95.9% of the planned figures in 2004. The target set for employers and hired workers was met by 95.1% and the one established for the self-employed was up 56.3% to stand at AMD1,125.4BN against the planned 720 million. According to Mr. Khachikyan, a total surplus of 6,105.1 billion dram in annual receipts for social contributions inclusive of the balance had at the start of the year was achieved in 2004. The overall requirement of the Fund in budget financing was met as a whole. Mr. Khachikyan advised that 886 evasive employers and 1333 self-employed businessmen were detected and put on register with 345 employers and 1954 self-employed entities liquidated in the year under review. Efforts were made to reveal the incidences of latent employment. To this end, 2077 insurers had been exposed to casual inspections. About AMD37.6MN in compulsory social payments were re-calculated for 546 non-registered corporate staff, of which 22 million was actually collected. Employers were imposed AMD42.6MN in administrative penalties with 26 million drams actually charged.
According to the President of the Fund, a special focus was placed on those measures aimed at ensuring the sustained growth of pensions and the introduction of a scheme of individual registration in the system of pension insurance. In particular, by a government decree, 140 drams were set to be the yearly basis for the calculation of insurance-sensitive length-of-service as of January 1, 2004, which was taken up to 160 drams on October 1 of the same year. As a result, pensions averaged 8,829 drams in November, 2004 against the 7,453 drams of the same period in 2003. Under the program of social reforms, the needed functions were implemented in order to provide our citizens with individual social cards for purposes of income statements. Such cards have already been made available to more than 430.000 of the 640.000 individuals registered with the local employment centers.
Among the failures and shortcomings still available in the activities of the Fund, Mr. Khachikyan mentioned a number of problems associated with the non-payments of compulsory social contributions due to the system of "shadow" wages applicable in the private sector, the fight against latent employment, the arrears and the collection of the fines and penalties imposed thereon etc.
The Board endorsed the proposed organizational structure of the central apparatus of the Fund and decided to instruct the President of the Fund to have it submitted for government approval. It was also decided that the general level of staffing should be reduced from 588 to 425.
Prime Minister A. Margaryan, Chairman of the Board of Trustees of RA State Insurance Fund, indicated that the main directions of the reforms undertaken by the execuve would be continuous as they had been integrated with the overall strategy of government activities and, in this respect, the Fund had a lot of work to do in support of the government strategy and the discharge of the tasks set forward.
