Thursday, 19 April 2007
Today RA State Social Insurance Fund Council has met, chaired by council chairman, Prime Minister Serzh Sargsyan.
The Council discussed and approved of the 2006 annual report on State budget performance for compulsory social insurance. The sitting similarly reviewed the progress in the execution of the assignments given at the previous meeting.
Concerning the first question of the agenda, Chairman of State Social Insurance Fund Vazgen Khachikjan reported that the 2006 actual receipt of the State Social Insurance Fund budget, inclusive of the funds allocated with the purpose of financing social security programs carried out through the State budget, rose to 99 billion 684,4 million drams, with the expenditures atnding at 91 billion 71,7 million drams. Actual receipts of compulsory social insurance payments were 80 billion 214,4 million drams, with the annual target having been fulfilled by 109,1%. The volume of social payments received exceeded that of 2005 by 16 billion 333, 2 million drams. The Fund's demand in budget financing has been met in full.
In reply to Prime Minister's question on the differentiation made in terms of payment of pensions in Yerevan and marzes, due to which marz pensioners cannot receive the pension within each month, the Chairman of the State Social Insurance Fund said that it was associated with a number of technical problems. He reported that as a follow-up to Prime Minister's latest instruction, the Fund had called a meeting with the purpose of deciding the problem, and in five out of ten marzes of the republic the payment of pensions for the month of April had already begun. In the remaining five marzes, the payment of pensions will start tomorrow. As from May, pensions will be paid in a synchronized manner in all the settlements of the country, inclusive of the capital.
Regarding the next agenda item, the Prime Minister emphasized the importance of paying the pensions for this May before the holiday of May 9. Vazgen Khachikyan assured that pensioners will meet the holiday with received pensions.
The Prime Minister wanted to know if the pre-election pledges voiced by some politicians, political forces and individuals were realistic, according to which, once elected, they would raise 3-fold the pensions and base wages as of January 1, 2008. And if so, which way such rises might affect the economy of our Republic? The Chairman the State Social Insurance Fund and the representative of the Ministry of Finance and Economy noted that these promises were not realistic. As they said, it is in theory possible only if social insurance payments themselves grow 3 times as much with the latter supposed to increase the employers' charge by approximately three times as even larger sums will be withheld from salaries for social insurance purposes, which may result in the reduction of jobs. Besides, consumer prices will go up inevitably. It was noted that the size of possible increase of pensions was determined as a result of calculations made not only by the State Social Insurance Fund, the Ministry of Finance and Economy, the State Tax Service by the Government, but also based on the findings of an international group of experts. They similarly stressed that it was impossible because the worldwide practice had never before known a precedent of such an abrupt increase, even if latent salaries and shadow incomes are brought in to the field of taxation, in a direction of which significant work had been done recently.
With reference to other parameters included in the annual report of the Fund, V. Khachikyan said that in the year 2006 the expenditures financed by compulsory social insurance payments rose to 71 billion 694,4 million drams, including 66 billion 452,3 million drams through pension insurance, under State employment programs -852,5 million drams and under separate State social insurance programs-2 billion 768,1 million drams, by expenditures on the maintenance and development of the Fund system-1 billion 526,7 million drams, under miscellaneous expenditure items -94,9 million drams. The Chairman of the Fund also reported that the by decision of Government N 215N of December 15, 2005, as of January 1, 2006, basic pensions and the cost of one year's insurance-sensitive length of service were raised in December, 2006 leading to 10 thousand 854 drams paid as general average pension (an increase of 1130 drams against 2005), the average insurance pension rose to 11 thousand 381 drams (compared to 2005, it grew by 1184 drama). Honorary payments to the veterans of the Great Patriotic War, the pecuniary assistance available to disabled servicemen and their families, as well as the compensations paid for the disability suffered at workplace, professional sickness and other allowances, too, have grown considerably. According to the speaker, the study of pension payments and the check-ups carried out have helped to streamline the indexations procedures to a certain extent. Among other achievements, it was reported that during the accounting period the Fund had actively participated in the practical realization of reforms in the pensions system, as well as in the activities on the development of draft legislative and sub-legislative acts concerning the sector of social security and insurance. The discussions held over the reform of system of pension administration and the following draft laws: "On RA State Social Insurance Fund," "On Pension Administration for Civil Servants," "On Personal (Individual) Records in State Pension Social Insurance System" stemmed from the context adopted during the development of said laws by the government decision on the approval of the concept note on the reforms of RA pension insurance system. The Chairman of State Social Insurance Fund also reported that in the framework of Armenia's Social Reform Program the Fund had carried out considerable work in terms of providing citizens with personal social cards, application of the system of personal record. It was noted that currently the system of personal record was operational throughout the whole territory of the Republic of Armenia.
