Regarding the questions raised regarding Artsakh residents’ funded pensions, we deem it necessary to clarify the following:
On January 16, 2024, a new article was added to the Law of the Republic of Armenia “On Funded Pensions,” which stipulates that in cases of force majeure, extraordinary circumstances, and other circumstances, pension fund shares acquired through funded contributions made for (in favor of) the participant are redeemed, and the funds in the participant’s pension account (regardless of their amount) are transferred to their account opened with another pension fund or returned to their bank account in accordance with the procedure established by the Government of the Republic of Armenia. On February 29, 2024, a decree by the Government of the Republic of Artsakh established the procedure for redeeming pension fund shares and transferring the resulting funds (regardless of their amount) to an account opened in another funded pension system or to a participant’s bank account upon their request. The Artsakh Information Center issued a statement on this matter.
“A corresponding application was submitted to all authorized bodies to redeem pension fund shares and transfer the resulting funds to the beneficiaries’ bank accounts, but the request for a refund of the accumulated payments was denied.” Moreover, an amendment was made to the RA Law “On Additional Guarantees for the Protection of the Rights and Legitimate Interests of Participants in the Funded Component of the Pension System,” adopted by the RA National Assembly on June 13, 2024, according to which an individual (including an individual recognized as a refugee under temporary protection), in whose favor accumulated contributions have been made to an investment fund registered in the RA, with the exception of funded pension funds operating within the RA funded pension system, may submit an application to transfer their pension savings to the RA funded pension system within three months of the authorized state pension authority establishing procedures related to the transfer of pension savings. In this case, the shares of the investment fund owned by the individual are redeemed, and the resulting amount is transferred to the mandatory pension fund of their choice. If an individual fails to submit an application for the transfer of pension savings within the timeframe specified in this section, the person maintaining the register of participants in another investment fund is obligated to redeem the shares of the other investment fund owned by that individual within the specified timeframe and transfer the proceeds to a mandatory pension fund that is closest in asset structure to the asset structure of that investment fund.
One-fifth of the deputies of the National Assembly of the Republic of Armenia (deputies from the “Armenia” and “I Have the Honor” factions) appealed to the Constitutional Court of the Republic of Armenia with a request to determine the compliance of this article of the Law of the Republic of Armenia “On Additional Guarantees for the Protection of the Rights and Legitimate Interests of Participants in the Funded Component of the Pension System” with Articles 29, 60 (ownership rights), 78 (principle of proportionality), and 79 (principle of certainty) of the Constitution. In other words, the provision of the law stipulating the mechanism for transferring the accumulated funds of Artsakh residents to the funded system of the Republic of Armenia without regard to their will was challenged under constitutional law.
By Resolution No. SDAO-176 of November 19, 2024, the Constitutional Court of the Republic of Armenia rejected the case seeking to determine the constitutionality of Article 8.1 of the Law “On Additional Guarantees for the Protection of the Rights and Legitimate Interests of Participants in the Funded Component of the Pension System,” as interpreted in law enforcement practice.
Attempts to return the accumulated pension funds of Artsakh residents to their bank accounts were rejected. An amendment to the RA law stipulated that these funds should be transferred to the RA funded system either upon the participant’s request or automatically. The constitutionality of this automatic transfer mechanism was challenged in the RA Constitutional Court, but the Supreme Court dismissed the case,” the statement reads.