The Law of Ukraine «On general state pension insurance»
Law of Ukraine «On general state pension insurance» No. 1058-IV of 9 July 2003 was adopted, as they say, for the general public.
This Law regulates the pensions of the Ukrainian citizens, who will retire on pension since 2004. The citizens, who had retired before 1 January 2004, had to get the pensions recalculated in the accordance with this law. The people were waiting for this day, because the officials promised to increase the pensions for 25%.
Here we will pull up before the jump into the happy pension future and will recollect that the «general» Law, the functioning of which should be supported with the insurance contributions of all working citizens and employers to the Pension Fund of Ukraine, is supplemented with several tens of the so-called «special» pension laws.
In other words, the money are gathered into the «all-Ukrainian pension stock» on the basis of salaries, and then this sum is distributed reasoning from the «caste», to which the future pensioner belongs. And such distribution seems to be somewhat unreliable.
It was meant at the approval of the State Budget-2004 that the part of pensions, consisting of the contributions to the Pension Fund on the general grounds, would be paid at the expense of the Fund, and the difference between the «elite» pensions and «common» ones would be recompensed from the State Budget.
Yet, as early as in the beginning of the past year, the leaders of the corresponding agencies began to tell in mass media that the budget money for the compensation of special pensions were not received by the Pension Fund. The last amount of the deficit caused by this situation was about 2 million hryvnas.
On 29 November 2003 the newspaper «Zerkalo nedeli» wrote:
«… According to the data of the Ministry of Labor and Social Politics, the Ministry of Finance did not give about 1.5 million hryvnas for differentiation of the authorities in payments between the Pension Fund and State budget in 2004. Evidently, when the Pension Fund hinted that the additional sums would not be paid if they would not obtain money from the state treasury, Article 84-1 appeared in the second version of the budget: «In the case of insufficiency of the funds allotted from the State Budget for the budget programs, connected with differentiation of the sources of pension payments between the Pension Fund and the State budget, the pensions envisaged by legislation for the corresponding categories of citizens must be paid completely from the Pension Fund». Both Mikhail Papiev, the Minister of Labor, and Boris Zaychuk, the head of the Pension Fund, insisted that this article would not exist in the final version of the budget. However, the people’s deputies approved the resolution on the adoption of the budget in the second reading, which contained the same text, and there were no mentions that this article had been cancelled…»
The Law of Ukraine «On the State Budget of Ukraine for 2004», the operating version of 27 November 2003:
«Article 90. In the case of insufficiency of the funds allotted from the State Budget for the budget programs, connected with differentiation of the sources of pension payments between the Pension Fund and the State budget, the pensions envisaged by legislation for the corresponding categories of citizens must be paid completely from the Pension Fund».
The Cabinet of Ministers, which likes the so-called «manual control» of economic processes, instantly understood the situation and issued Resolution No. 1783 of 20 November 2003 «On the measures for improvement of provision of pensions of citizens».
Since this Resolution had quite other goals, but not the «improvement of provision of pensions of citizens», the supreme organ of the executive power of the country had to resort, firstly, to the falsification of the statistical data about the average salaries in 1958-1991, increasing them for 5-20 hryvnas per year, and, secondly, to «manual» exchange of the average salary for 2002, which is mentioned in Article 43 of Law No. 1058, for the «index of average salary» invented by the authors of Resolution No. 1783 of 20 November 2003.
By the data of the State Statistical Committee of Ukraine, the average salary in 2002 was equal to 376 hryvnas. According to the Resolution of the Cabinet of Ministers this «index» decreased to 306.45 hryvnas (i.e. for 20%).
All pension calculations in the «pre-Yanukovich times» were made on the basis of the untaxed salaries.
This approach is used in Convention No. 102 of the International organization of labor, but our leaders are trying to interpret this Convention «after Yanukovich» too.
Pensions are recalculated, fooled pensioners are crying, queues have appeared in district offices of the Pension Fund, and doctors are on duty in some most progressive offices…
Resolution No. 1783 is supplemented with Order of the State Statistical Committee of Ukraine No. 5 of 13 January 2004 «On the approval of the Instruction on the statistics of salary», Order of the State Statistical Committee of Ukraine, Ministry of Labor and social politics, Ministry of Economics and European integration No. 472/352/398 of 31 December 2003 and Resolution of the Pension Fund No. 22-1 of 31 December 2003 «On the approval of the Temporary procedure of calculation of the indexes of average salary of the workers employed in the spheres of national economics for grating pensions according to the Law of Ukraine «On general state pension insurance»».
Everything happens as usual, in the «manual regime», and «young» pensioners are joining the «old» ones…
What one should done, what references should be ordered? People do not know, and inspectors do not know where is the boundary of the fantasy of power structures. The officials in some district offices demand from the persons, who were not working at the moment of fixing (recalculation) of the pension, the reference that this person is not a businessman. Oh, God! Well, businessmen can have the main job, even in the Supreme Rada, live in some small town (according to the registration) and own the private business for his own moral, and, maybe, material satisfaction, in any place, for instance, in Kharkov!
As to Law No. 1058, I cannot comprehend, on what logic the legislators grounded. Why the average salary for 1991 – 495 Soviet rubles, is considered to be equal to 306.45 hryvnas in 2002? How to understand the fact that a person, who earned 306.45 hryvnas per month in 2002 (that is average salary «after Yanukovich») has the coefficient less than one for this year, since the real average salary in 2002 was 376 hryvnas? At that a person with salary 376 hryvnas in 2002 is regarded as one earning 306.45, and the salary of 462 hryvnas in 2003 also turns into 306.45 at the recalculation in accordance with Article 43, although the contributions to the Pension Fund were paid from the sums equal to 376 and 462 hryvnas. It is comprehensible, when the Soviet salaries are «modernized» to the level of 2002 or 2003, explaining that by inflation. Yet, who can apprehend such logic of legislators!
Even in 2003, when Mr. Yanukovich was not so «progressive» yet, the Cabinet of Ministers of Ukraine issued Resolution No. 1151 of 24 July 2003 «On the procedure of assessment of salaries for calculation of pensions and additions to pensions», according to which «… If the salary (income) is assessed in accordance with part 3 of Articles 65 and 69 of the Law of Ukraine «On provision of pensions» and item 2 of the Provisions of Law of Ukraine No. 854-IV of 22 May 2003 «On introduction of changes into the Law of Ukraine «On provision of pensions»», the average monthly salary (income) is calculated by division of the total sum of salary (income) for these months by the number of calendar months, which are considered…» The situation is meant, when the reference about salary for last two years is presented, as it was stipulated by the norms of the Law «On provision of pensions» changed on 22 May 2003.
The situation has formed, when, on the one hand, Letter of the Pension Fund No. ¹03/9645 of 3 December 2003 on the recalculation of pensions according to the new Law prolonged the right to present the reference about the job in two years after giving the pension, and, on the other hand, people lose great sums through the «modernization» of salaries. For example: a pensioner worked for two years (2002 and 2003) and got the salary twice more than the average one, that is 750 and 920 hryvnas, respectively. The calculation of pension would be realized on the basis of the sum of 306.45 hryvnas. That means that «after Yanukovich» the person got 612 hryvnas for these two years, and 750 and 920 were only a hallucination. The same wonders are waiting for those, who will turn for pensions in 2004.
At the same time Resolution of the Pension Fund No. 22-1 of 31 December 2003 «On the approval of the Temporary procedure of calculation of the indexes of average salary of the workers employed in the spheres of national economics for grating pensions according to Law of Ukraine «On general state pension insurance»» is operating. According to this Resolution, the statistical data about salaries must include only the sums, from which the contributions to the Pension Fund were paid. The talks that the income taxes should be also taken into account are ungrounded and illegal, and even head of the Pension Fund stopped to recollect about this idea.
When Resolution No. 1783 was adopted, the officials explained:
«…Earlier another sum – 376 hryvnas 38 kopecks, had been fixed as the average salary for 2003. Yet, the government takes into account that pension is, in a sense, a compensation of salary. So, the government considered as necessary to consider not the average salary, which was mentioned in documents, but the factual sums, which was get by people. Everybody knows that our citizens pay taxes and dues from their salaries. For instance, the income tax equal to 60 hryvnas 83 kopecks is levied from the salary of 376 hryvnas 38 kopecks, as well as the contributions to the Pension Fund, fund of employment of population and the fund of social insurance against the disability. So, after all takeouts the «pure» average salary equals to 306 hryvnas 45 kopecks».