Frequently asked questions
What pension system is operating in Armenia?
The funded pension system is operating in Armenia since 2014, following the previous distributive pension system.
Why did Armenia switch to a funded pension system?
What is the difference between the funded pension system and the previous pay-as-you-go pension system?
What are the advantages of the funded pension system?
Are my pension contributions guaranteed?
Yes, the Republic of Armenia guarantees the return of your pension contributions adjusted for annual inflation.
Me as a participant
Am I a participant in a funded pension system?
How much are my monthly pension contributions?
How much pension will I receive?
When can I receive my pension contributions?
- sufficient funds have been accumulated in the pension account (about AMD 20 mln),
- the participant is seriously ill as defined by the Law,
- the participant has been recognized as a disabled person with the third degree of limitation of the ability to engage in work activities,
- the participant is a non-resident who worked in the RA and returned to his country of residency.
Are my pension contributions inheritable?
How can I receive my pension?
- Lump sum: all the accumulated pension is redeemed in a single one-time payment.
- Annuity: your accumulated contributions are transferred to an insurance company which will pay you a pension in equal monthly installments for the rest of your life.
- Program payments: your contributions will continue to be managed in the pension fund, and the fund management company will distribute your pension over a period of 12 years (which is the current life expectancy period) and pay you pension through monthly redemptions.
What is a pension fund?
A pension fund is a pool of assets where you and other participants contribute for future pensions. Professional fund managers manage pension fund assets, invest in different financial instruments, manage the risks and reinvest the profits with the objective to provide long-term return on investment for the participants.
What is a pension fund share?
Contributing for your pension, you acquire pension fund shares in proportion to your contributions representing your ownership right to a portion of the fund's assets. Similar to buying a property, when the ownership certificate confirms the ownership right, pension fund shares verify your ownership right in the pension fund.
How are the funds managed?
The main objective of pension fund management is to ensure the long-term return of fund assets. For this purpose, depending on the fund you choose, up to 50% of pension assets can be invested in stocks, equity funds, and equity-equivalent instruments. The remaining is invested in bonds, deposits, fixed-income funds, money market instruments, and other financial instruments in Armenia and abroad.
Who is managing my pension fund?
What are the fund manager's main functions?
- allocating assets according to funds' investment objectives,
- minimizing investment risks,
- portfolio rebalancing,
- monitoring local and international financial markets,
- analyzing and assessing investment opportunities and more.
Why can't I manage my pension contributions?
Pension fund managers provide you with professional asset management services. With an expertise in asset management, fund managers are equipped with the knowledge, experience and tools needed to manage funds and are skilled in making the best investments in your interests. Moreover, investing your pension contributions in pension funds reduces investment risks due to the multi-layer diversification of assets, saves time, and reduces operational costs of investments.
Where are the pension fund assets invested?
- A minimum of 60% of fund assets are invested in AMD, and the rest can be invested in foreign currency.
- Depending on the fund you choose, up to 50% of pension assets can be invested in stocks, equity funds, and equity-equivalent instruments. The remaining is invested in bonds, deposits, fixed-income funds, money market instruments, and other financial instruments in Armenia and abroad.
What type of pension funds can I accumulate my contributions in?
- Fixed Income (CQFIX) fund is suitable for participants with low-risk tolerance. 100% of its assets are invested in bonds, deposits, money market instruments, and fixed-income funds that invest in the above instruments. The fund does not invest in equities.
- Conservative (CQCON) fund is suitable for participants with moderate-risk tolerance. Up to 25% of fund assets can be invested in stocks, equity funds, and equity-equivalent instruments, and the remainder is invested in deposits, fixed-income funds, money market instruments, and other financial instruments.
- Balanced (CQBAL) fund is suitable for participants with relatively higher-level risk tolerance. Up to 50% of its assets can be invested in stocks, equity funds, and equity-equivalent instruments, and the remainder is invested in deposits, fixed-income funds, money market instruments, and other financial instruments.
What are the differences between pension funds?
What affects the pension fund performance?
The Net Asset Value (NAV) per Share changes depending on the change in the net assets of the fund. The change in the NAV per Share is the fund's performance for the given period in percentage terms. As the the fund assets are invested in different financial instruments, factors affecting market prices of these instruments are also different, some of which can be changes in interest rates, foreign exchange rate or market fluctuations, etc.
What are the risks associated with pension funds, if any?
My account management
Can I manage my pension account?
- Log in on ArCa website or mobile application.
- See your pension fund and contributions in the funded pension section.
- Choose your pension fund according to your risk tolerance. From now on, you will make pension contributions in your chosen fund.
How can I choose a pension fund?
- Open the Pension Account section on the ArCa application.
- See the monthly contributions and your active fund in the transactions sub-section.
- Choose the fund corresponding to your risk tolerance. From now on, you will make pension contributions in your chosen fund.