The Accumulated Pension Funds of Deceased Individuals Are Transferred to the State Budget: Heirs Often Do Not Even Know About Their Rights

The money accumulated in the funded pension accounts of deceased citizens may be transferred to the state budget because heirs do not apply to the Central Depository in time and often do not even know that their relative had such an account. An investigation by Hetq shows that the current regulations do not provide a sufficient notification mechanism for heirs. As a result, a person may lose the funds accumulated by a deceased relative without ever learning of their existence.

According to data published by Hetq, the Ministry of Finance filed 119 lawsuits with the courts in 2021, 319 in 2022, 87 in 2025, and, as of October 8, 2026, 128 lawsuits, seeking to have the units of deceased citizens' funded pension funds declared ownerless. No such lawsuits were filed in 2023 and 2024. In total, this concerns 653 court cases.

According to the same publication, more than 90.8 million drams have been transferred to the state budget in these cases over the past five years. As of September 23, 2026 alone, the amount transferred stood at 25.1 million drams. These figures refer to funds already transferred to the budget and do not reflect the total amount accumulated in deceased citizens' accounts.

Three Years Without Notifying the Heirs

Under Part 7 of Article 57 of the Law “On Funded Pensions,” the units of a deceased participant may be declared ownerless through judicial proceedings if the person has no heirs, or if none of the heirs has applied to the Central Depository within three years of the person's death to accept ownership of the units. The Depository notifies the Ministry of Finance of this, and the Ministry may then apply to the court. Following the court's decision, the units are redeemed, and the resulting amount is transferred to the state budget.

However, the law does not oblige any authority to search for the deceased person's heirs and inform them of the existence of the funded pension account within those three years. Nor is a notary obliged, during the processing of an inheritance, to independently establish whether the deceased had a funded pension account. This means that an heir may complete the inheritance process for a relative's apartment or other property without knowing that they are also entitled to the money in the funded pension account.

Hetq has presented several such cases. On October 25, 2019, 22-year-old rescuer Samvel Develyan died while carrying out firefighting operations in the mountains near Vanadzor. His parents learned about his funded pension account only during the inheritance process. The family assumed that they could receive the money at any time, unaware of the three-year deadline established by law and the possible court proceedings that could follow.

19-year-old Lyonik Herkoyan died in a motorcycle accident. He had been officially employed and had a funded pension account, but his relatives had no information about it. After the three-year period had expired, the Central Depository notified the Ministry of Finance, which then applied to the court seeking to have the deceased's units declared ownerless.

The Court May Reject the Ministry's Lawsuit

The Hetq publication also presents the case of Lusine Sargsyan. The resident of the village of Azatan had died in 2017 at the age of 42. She had worked as a cleaner at the village school. In 2020, the Central Depository notified the Ministry of Finance, and on June 2, 2021, the Ministry applied to the court seeking to have the units in her funded pension account declared ownerless.

During the court proceedings, the deceased woman's son, Gevorg Sargsyan, appeared and stated that his mother had heirs: a husband and seven children. The family had not applied to a notary because they had not known about the funded pension account. At the same time, the relatives had actually possessed and managed the deceased woman's property, covered the funeral expenses and paid her debts. The court left the case without examination due to the existence of a dispute concerning the right in question. The family later told Hetq that, because they had travelled abroad and had not completed the process, they never received the money.

According to the publication, Judge Nelli Harutyunyan of the Yerevan First Instance Court rejected the Ministry of Finance's claims in six of the nine similar cases she had handled, while three were still under examination. According to the judge's approach, the mere fact that an heir did not apply to the Depository within three years is not sufficient to declare the units ownerless. It must also be established whether the deceased had any heirs at all. The absence of an heir's application does not in itself prove the absence of heirs.

This approach shows that the court must consider more than just the expiration of the statutory deadline. It must also establish whether the deceased person's heirs exist and whether they were aware of the funds to which they were entitled. However, in cases examined under special proceedings, heirs may not participate in the court proceedings at all and may have no opportunity to defend their rights.

Lawyer Haykaz Galstyan told Hetq that the state should create mechanisms to identify heirs and notify them. One of his proposals is for the Ministry of Finance to publish in advance the names of deceased citizens whose pension fund units it intends to ask the court to declare ownerless. He also proposes collecting additional contact details within the funded pension system so that the heirs of a deceased participant can be informed about the existence of the account.

Galstyan also considers problematic the possibility of declaring individual assets belonging to an estate ownerless. Under the logic of civil legislation, acceptance of an inheritance applies to the entire estate. Actual possession of a deceased person's apartment and actions aimed at maintaining it may mean that the heir has also accepted the other property, including the units in the funded pension account. The lawyer also noted that a person who did not participate in the court proceedings may appeal the judicial act to the Court of Appeal within three months of becoming aware of it, subject to the general time limits established by law.

The current procedure effectively places all responsibility on the heir: they must know about the deceased person's funded pension account, manage to apply to the Depository within three years and monitor any possible court proceedings. Meanwhile, state authorities can initiate a process without notifying the heirs in advance, at the end of which the money to which they are entitled will be transferred to the budget.

The data published by Hetq shows that this is not a matter of one or two isolated cases. Hundreds of lawsuits and tens of millions of drams transferred to the budget demonstrate the consequences of the current procedure. The legislation must guarantee that heirs are informed in advance about the existence of the deceased person's funded pension account and their rights. Without such notification, the three-year deadline may expire, depriving people of the opportunity to receive the funds to which they are entitled.