Friday, October 11 2013

Shen Holding, a major manufacturer of construction materials in Armenia, has signed an agreement on voluntary pension coverage for its staff with "Capital Asset Management" CJSC ("CAM" CJSC), the first and still only company in Armenia to manage voluntary pension funds. 

Anna Vardanyan, Corporate Secretary of Shen Holding, has told ArmInfo that Shen Holding is the first company in the real economy to care for the future (supplementary) pension benefits of its employees.  "This decision is an integral part of a socially responsible company's policy and one of the most important tools of the employee incentive program", she says.   

Vardanyan specifies that Shen Holding offered two voluntary pension schemes to its staff, specifically, joint funding (the company doubles the employees' pension contributions) and unilateral funding (as a pension trustee, the company makes contributions unilaterally). For the moment, Shen Holding's employees prefer the latter. According to this scheme, the company makes pension contributions worth 1% of the employees' wages on a monthly basis but leaves the wage rate unchanged.

Shen Holding's employees choose the policy of investing their future pensions. Each of the employees has an opportunity to choose between the two funds of Capital Asset Management (CAMavor-1 and CAMavor- 2) or the ratio to distribute the monthly payments between the two funds. The company specifies that CAMavor-1 envisages investing the pension contributions in securities that ensure sustainable yield, specifically, in government and corporate bonds as well as corporate securities issued by the local executive bodies. Up to 20% of all the pension assets can also be invested in bank deposits and up to 25% - in unit investment funds. The policy of CAMavor-1 also envisages investing assets in derivatives for hedging purposes only. 

CAMavor-2 implies a conservative investment policy. Unlike the policy of CAMavor-1, this one also provides for investment of pension assets (up to 25%) in equity securities.   

Shen Holding dates back to 1970 when the largest enterprise for state supplies of non-ferrous metals ("HayGunMet") was established. In 1995, the latter was privatized and transformed into Shen Concern CJSC. Having merged with Huntsman Building Products, Shen Concern was converted into Shen Holding which nowadays encompasses Shen Concern CJSC, Huntsman Building Products and Shen Group.

"Capital Asset Management" closed joint stock company was the first company in Armenia to receive a Fund Manager License from the Central Bank of Armenia. The company was established and registered on 18 October 2012 to manage investment funds and voluntary pension funds. Its authorized capital is AMD 210mln (21,000 common stocks with a nominal value of AMD 10,000 each).