A labor pension is a monthly monetary compensation provided in return for social security contributions made from your salary and/or income.

The longer your work experience, the higher your labor pension amount will be.

A labor pension is available to citizens who have reached the age of 63 and have at least 10 years of work experience.

Although the standard retirement age is 63, you may apply for a labor pension at age 62 if:

• you have 35 years of work experience,
• you are not currently employed.

Please note, however, that if you return to work after your pension is granted, your pension payments will be suspended until you reach the age of 63.

To apply for a labor pension, you must submit the following documents to any branch of the Unified Social Service:

Application form to which you must attach:

• Identification card (ID card) or passport,
• Social Security Card (not required if you have an ID card) or a certificate stating you do not have one,
• Employment record book and, if necessary, other documents or archival certificates confirming your work experience,
• Higher education diploma,
• Military record book (for men).

Please note that in certain cases, you may also need to provide:

• A certificate confirming social security contributions (issued by the tax service office) or a certificate from your employer detailing your salary by year and month,
• Children's birth certificates or certificates of birth,
• A 3 x 4 cm photo (if you wish to receive a physical pension certificate).

• The labor pension is provided to both men and women who have reached the age of 63, based on their application.
• The pension is calculated from the day the application is submitted and is paid out during the first 10 days of the month following the application date.
• A physical pension certificate is issued to the pensioner upon request.
• The old-age pension is granted for life.

Attention

• If you apply within 3 months after turning 63, the unpaid pension amounts for that period will be paid as a lump sum.
• If you apply later than 3 months, you will not receive pension payments for the preceding months.
• If your application is approved but you do not collect your pension (for example, if you are out of the country), the pension is preserved for up to 1 year within a 5-year period of absence.
• If you are absent for 5 years or more, the unpaid pension amounts are not preserved.

There are two ways to receive a labor pension:

• Cash
• Non-cash (Bank Transfer)

Only individuals aged 75, as well as persons with a Group 1 or Group 2 disability, have the right to receive their pension in cash.

In all other cases, the pension is provided via non-cash transfer through the bank specified in the pension application.

Attention

• Pensions can be collected by an authorized person based on a notarized power of attorney. This is only possible in cash at the HayPost branch located at the pensioner's registered address.
• Please note that a power of attorney is valid for 12 months. If a new power of attorney is not provided each year, pension payments will be suspended and will not resume until a new one is submitted.
• Pensioners receiving their pension via non-cash transfer must visit the bank at least once a year to sign a declaration confirming their presence in Armenia.

A labor pension is not granted if the citizen does not have at least 10 years of work experience.

If a citizen does not have 10 years of work experience, they are eligible to receive a monthly old-age benefit starting from the age of 65.

To apply for the old-age benefit, you must submit the following documents to any branch of the Unified Social Service:

• passport or identification card (ID card);
• Social Security Card (not required if you have an ID card) or a certificate stating you do not have one.

The current amount of the old-age benefit is AMD 36,000.

The labor pension amount is calculated using the following formula:

Monthly Pension Amount = AMD 24,000 + (Years of experience * Value of 1 year of experience) * Pensioner's personal coefficient

Value of 1 year of work experience:

• AMD 950 for each of the first 10 years.

• AMD 500 for each year exceeding 10 years.

The pensioner's personal coefficient is defined as:

• 0.1 for each year of work experience up to 10 years (inclusive).

• 0.01 for each year of experience from 11 to 40 years (inclusive).

• 0.02 for each year of experience exceeding 40 years.

Example

An applicant has 42 years of work experience.

The calculation is as follows: 24,000 + (10*950+32*500) * 10*0.1+30*0.01+2*0.02= 24,000 + 25,500 * 1,34 = 58,170

Attention
The minimum pension amount in Armenia is AMD 36,000. If the amount calculated using the formula is lower than 36,000 AMD, you will still receive AMD 36,000.

The majority of your work experience is formed by your years of employment, provided that the social security contributions required by law were made during those years.

The following are also included in your work experience:

• Up to 6 years maximum for non-working women caring for children under the age of 2.

• The 2 years of mandatory military service for men.

• The period of full-time (daytime) study at educational institutions, excluding general education schools (up to a maximum of 6 years).

Please note that t is not mandatory to have a formal labor contract between the employer and employee. It can also be a service contract, provided that the legally required payments are made (this applies only to contracts signed after January 1, 2013).

A labor pension application may be refused if:

• The individual does not have the right to a pension (e.g., does not meet age or work experience requirements).
• According to the data in the State Population Register, the individual does not have a place of residence (address) in the Republic of Armenia.
• The individual has not submitted the necessary documents for granting a pension in the prescribed manner and timeframe.

If the application is refused, you will be notified within 15 working days after the application was submitted.

The provision of a labor pension may be terminated if:

• The pensioner renounces RA citizenship;

• The pensioner establishes permanent residency in a foreign state;

• The pensioner receives a pension from another state;

• False documents are discovered in the pension application file;

• The residency permit expires (in the case of foreign citizens);

• For non-cash payments, the pensioner fails to visit the bank at least once a year to sign the declaration confirming they reside in Armenia;

• The validity of the power of attorney (12 months) for an authorized representative to receive the pension expires. 

The provision of a pension is also terminated upon the death of the pensioner, or if they are legally declared deceased or missing.

Deductions will be made from a labor pension if:

• The pensioner submits documents containing incorrect information;

• The pensioner is erroneously paid an amount higher than what was assigned.

Yes, the CES (Compulsory Enforcement Service) can make deductions of up to 30% of the pension amount until the seized funds are fully repaid. However, this is provided that the remaining amount to be paid after deductions is not less than the social benefit amount set by the RA Government.

Deductions cannot be made from an individual's funded pension assets during the accumulation period until they begin receiving the funded pension in accordance with the law.

The 20% cashback can only be received by pensioners who are RA citizens and receive their pension through the program's partner banks.

The following banks participate in the 20% cashback program:

• Acba Bank OJSC
• AMIO Bank CJSC
• ID Bank CJSC
• Araratbank OJSC
• Ardshinbank CJSC
• Artsakhbank CJSC
• Evocabank CJSC
• Inecobank CJSC
• Converse Bank CJSC
• Armeconombank OJSC
• Unibank OJSC

If a pensioner receives their pension through the banks mentioned above, they can automatically benefit from the program and receive a maximum of AMD 10,000 in cashback by making non-cash transactions exclusively at retail outlets and service providers operating within the territory of the Republic of Armenia.

If a pensioner receives their pension from a bank that does not participate in the 20% cashback program, they can change their bank to become a cardholder of a partner bank and benefit from the state support program.

A funded pension is a pension formed from the funds accumulated through an employee's social contributions, which will be paid to them in the future.

These payments are accumulated in an individual account and are invested in financial markets for the purpose of ensuring capital growth.

The funded pension system has been operating in the Republic of Armenia since 2014. Citizens receive a future pension thanks to the accumulation of social contributions made from their salaries.

The funded pension is mandatory for citizens born in 1974 and later.

However, it is also possible to join the funded pension system voluntarily. To join the funded pension system voluntarily, you must apply to the Central Depository.

The funded pension is formed from the monthly salary of a registered employee and the state budget.

• 5% is accumulated from the salary (if the monthly salary does not exceed  AMD500,000).
• An additional 5% is contributed by the state, but not more than AMD 25,000.

In the case of higher salaries, different rates apply, calculated so that an amount equal to 10% of the salary is allocated to the funded pension each month.

Furthermore, for citizens who joined the program voluntarily, the funded pension is formed only from 5% of their salary; no contributions are made on their behalf from the state budget.

Before reaching retirement age, the funded pension is kept in custody at the Central Depository of Armenia. The Depository, in turn, cooperates with 2 fund managers:

• "AMUNDI-ACBA ASSET MANAGEMENT" CJSC
• "C-QUADRAT AMPEGA ASSET MANAGEMENT ARMENIA" LLC

These fund managers accumulate the citizen's funds in various funds.

You can accumulate your pension in one of the 3 active funds:

• fixed Income,
• conservative,
• balanced.

These three funds differ from each other by their level of risk.

Assets are not invested in stocks.

Up to 25% of the assets are invested in stocks.

50% of the assets are invested in stocks.

First, it is very important to choose your funded pension fund and manager when starting a job for the first time. It is also important to study the activities and services offered by the current managers, as they will be managing your pension finances by investing them in various market stocks and ensuring capital growth.

You can accumulate your pension in one of the 3 active funds:

• Fixed Income
• Conservative
• Balanced

These three funds differ from each other by their level of risk.

Assets are not invested in stocks.

Up to 25% of the assets are invested in stocks.

50% of the assets are invested in stocks.

The main advantage of the funded pension is that it allows individuals to form their pension funds with greater flexibility and benefit from investment income. However, it also carries a certain level of risk, as the profitability of investments depends on the growth and fluctuations of financial markets.

The funded pension is paid in 3 ways:

• Annuity: Accumulations are transferred to an insurance company, which pays you a pension for life.
• Lump-sum payments: The accumulated funds are paid to you entirely in a single payment.
• Programmed withdrawals: The manager pays out the accumulations throughout your life based on official statistical data regarding the average life expectancy for your specific age group, calculated annually.

The amount of your funded pension depends on the balance accumulated in your account, the average life expectancy after age 63, and the basic pension amount set by the state for that year.

To receive your funded pension, you must submit an application to the Central Depository, which will provide a certificate regarding the funds in your account and the monthly payment amounts (calculated by dividing the available funds by the number of months of your expected life expectancy).

If the calculated monthly amount is less than or equal to 75% of the basic pension You can receive your pension as an annuity, programmed withdrawals, or as a lump-sum payment.

If the calculated monthly amount is less than five times the basic pension You receive your pension only in the form of an annuity.

If the calculated monthly amount is greater than five times the basic pension The amount up to the five-fold threshold is provided as an annuity. Any amount exceeding that threshold can be provided as a lump-sum, programmed withdrawals, or an annuity, based on your preference.

Funded pension contributions are made until the retirement age of 63. If you do not retire after reaching this age and continue to work, your employer is not required to make mandatory funded contributions from your salary. Similarly, the state stops making contributions on your behalf from the budget.

No, funded pension assets cannot be pledged as collateral or used to pay for other obligations (loans, compulsory enforcement obligations, etc.).

Yes, the funded pension can be inherited.

The heirs of the pensioner must apply to the Central Depository of Armenia with documents supporting the inheritance claim.

You can obtain information regarding the application conditions and required documents directly from the Depository.

The question arises, if a citizen actually receives the money accumulated through their work upon reaching retirement age and if there are any guarantees?

Yes, funded contributions are guaranteed by two entities:

• The Guarantee Fund
• The Republic of Armenia (state budget)

The Guarantee Fund was created specifically for this purpose and its function is to guarantee 20% of the return of funded contributions to the pensioner.

The Republic of Armenia, through the state budget, guarantees the return of the funded pension by 80%.

In other words, a citizen's funded pension is 100% guaranteed.

You can receive reports about your funded pension in 4 ways:

• "My Account" website
• Bank
• ATMs
• Applications

By passing authentication on the "My Account" page, you can obtain quarterly and annual reports of your funded pension.

There are several banks where, upon request, you can receive reports sent to your email address.

Through an ATM, you can view information regarding your pension account balance and the last 10 transactions performed on the account.

When checking via ATM, it is necessary to:

• Enter your bank PIN code;

• Select "Additional Services";

• Select "Pension Statement".

Information regarding your current pension account balance can also be obtained through the mobile applications of certain banks.

You can check your account via mobile app through CDAOnline, Inecobank, Acba Bank, Converse Bank, Ardshinbank, Unibank, AMIO Bank, Artsakhbank, Ararat Bank, and Armeconombank.