Negative Indicators of Pension Funds Worry Citizens

For the past two days, several citizens have reported negative indicators in their pension funds. They have discovered that the semi-annual results of pension funds show negative figures.

Former head of the Citizen's Decision Party, Suren Sahakyan, wrote on his Facebook page: "The global economy is expecting a recession (decline, lack of growth). It hasn’t started yet, but it is very likely to begin in the fall. Even before it starts, there are already bankrupt investment funds. In Armenia, people have discovered that their pension fund investments have decreased. We have always said that we won’t see the face of that money. What does the whole pension system mean? All working people in Armenia gather +/- 5 percent of their income in one place, then give it to a private fund, which invests 60 percent of that entire amount in Armenia at interest (to the state, banks in the form of deposits), and with the remaining 40 percent, makes various investments elsewhere, while taking a cut from the extra money for its services. Such funds have a bad habit of going bankrupt in the long term. No matter how much the organizers of this party claim that everything will be fine in the end, I remain of the opinion that it is insufficient for a significant part of our hard-earned money to not be spent now, not to stimulate our economy, while we give our money and then take it back with interest, and that 40 percent of that money is going out to enrich other economies, leaving us empty-handed in the end."

Coordinator of the “Suspension” civil movement and businessman Samson Grigoryan also commented on social media: "My pension fund is being wasted; the loss for this quarter has been 130%. No, I wrote correctly: the total of my payments and the state's payments, plus another 30 percent. State, authorities, what will you do to support retirees if the anticipated decline in stock markets takes place? Right, you won’t support them; it’s all about your pear anyway, head of the financial and credit commission, do something, let your young economic guru brain work. Your future pensioners are about to turn into a potentially poor, hungry, sick, and insolvent group. The accumulations of an entire nation have been wasted for a long time now, and nothing is being moved from any direction," wrote Grigoryan.

The issue was also addressed by public administration expert Hovhannes Avetisyan, who noted that he has seen many records of significant losses in pension accounts. "Have you thought about what might be the reason for this? Your money managers have the right to invest up to 40% of those funds in foreign currency abroad. And since our state is imaginary, that is, it doesn’t consider how to properly guide this enormous amount of prolonged money, for example toward infrastructure and issue long-term targeted bonds, fund managers convert them into foreign currency and invest them abroad. This means that a significant portion of our money is not serving our community at all. The remaining part (the law says at least 60% must be invested in AMD) is either deposited in local banks with pennies (enriching the banks) or they are buying bonds issued by mines or state treasury bonds so that they can use your money for budgetary ongoing meaningless expenditures. Returning to the cause of the loss: since a significant portion of your money (up to 40%) has been converted to foreign currency, and now the dram has appreciated, while you will ultimately be given drams, it turns out that your foreign currency investments have declined by at least 20% due to the appreciation of the dram (this is how much loss you have incurred). Add to this the issues in European financial markets (there are many potential investments there according to the law) and you will lose a significant portion of your accumulations. As I said earlier, this money should serve the state, not be thrown aside as if neglected, and whoever wishes can do whatever they want. To those rejoicing at the sharp appreciation of the dram, what do you expect, in a country with a high dollarized weight, many will incur such losses when the dram appreciates by around 20 percent within just 3-4 months. Also, continue to avoid politics; it will still be dealt with regardless. Lastly, let me add that yes, the creation of the cumulative pension system in this form and its quality management was/ is a political decision,” he noted.