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Sunday, February 18, 2018

Pensions outside the law

Long the public was agitated by the rumors that a second indexation of pensions this year may be replaced by a one-time payment to retirees. These rumors were denied by the authorities, saying that no, the issue is about re-indexing. And earlier were even leaked information, that is, it turns out that the order of the Prime Minister Ministry of labour to find reserves for indexing from 1 September 2016 8.56%.

Finally came the announcement about the decision: will a lump sum payment to pensioners in the amount of 5 thousand rubles in January 2017 instead of additional indexing. Receive payments 43 million pensioners, including those who continue to work.

How can it be? It is clear that the authorities are expressed in the spirit of how cool they fulfill the assumed social obligations. And really?

Let’s try to understand.

But first — the background. It is sad, this story. In 2016 the government is perhaps the first time I went on such a clear rejection of the assumed social obligations. And still the fact of their failure they did not recognize.

From 1 February this year, pension insurance and fixed payout to it was indexed by only 4%, not actual inflation, as required by law. Let me remind you that the official figure for inflation in 2015 is 12.9%. So consider how underpaid retirees.

Moreover, working pensioners this year did not raise pensions. Actually, not at all.

Then, when the adoption of the Federal budget for 2016, it was agreed that the government would consider re-indexing of the pensions closer to the fall, taking into account the situation prevailing in the economy and the social sphere. Well, the time has come to decide, especially as the elections to the state Duma soon — 18 September 2016. Decided — will be a one-time payment. But the law on the Federal budget for 2016 was established the right of the Government of the Russian Federation submitted to the state Duma proposals on the indexation. Right, not an obligation. That is, the government could make such a proposal, and could not do. It is not suggested indexing, and suggested it was a one-time payment.

So why was chosen a lump sum payment? It’s simple: the situation in the economy is much worse compared to how it was seen in December 2015 with the adoption of the Federal budget for 2016. Let me remind you that was thinking that the economy (GDP) in the current year will grow by 0.7%, and it falls.

This, incidentally, does not mean that there is no money. Just in this situation, the authorities need to reconsider the funding priorities. And this they did not want to go.

It is also important to imagine what the amount was to be indexed from September 1, pensions to provide full indexation to offset inflation by the end of 2015 in the amount of 12.9%.

Index current pensions had by 8.56%. And we had to make a lump sum payment in the amount of lost pension: within 7 months of retirees have less at of 8.56% of the current pensions, i.e. the authorities have accumulated debt at 59.9% of the current monthly pension amount. Given that for the first half of 2016, the average pension amounted to 12 359 rubles, a one-time payment covering nedouchtenny inflation for 7 months, needs to average 7.4 thousand rubles.

That is supposed to be a one-time payment in the amount of 5 thousand rubles, and 7.4 thousand rubles, and the indexation of pensions from 1 September 2016 8.56%. Look, it’s a hoax, it turns out, the wickedness of some, or how else can you call it, but in any case not the fulfillment of social obligations.

You know, in all fairness, the question was to be decided not in the format “either-or” in “both”.

But it is indexing plus a one-time payout — if the law and justice. And so with others, as we know, the problems.

Of course, the indexation of pensions for the authorities is far less profitable than one-time payment. And it is not even that onetime payment is the cost of the Federal budget, and the indexation of pensions is a burden on the Pension Fund, which, however, the money should be transferred from the Federal budget.

If you pension is indexed, all the following gain-indexation have been going to this increased pension. But if escaped with a one-time payment, the pension will remain the same in size. And hope again for some one-time payments in the future is not worth it. Received? Rejoice in it.

All these arguments about realism, proportionality, benefits and failure of a single payment compared to indexing we should not forget that inadequate indexation of pensions — it is wrong, it should not be, and it is even unconstitutional. Yes, no less — is unconstitutional.

Article 7 of the Constitution of the Russian Federation, as you know, declares Russia a social state whose policy is aimed at creating conditions for a dignified life and free development of man.

Social States are realized in the support of pensioners.

But the most important financial and economic mechanism available to the state to implement its social function, is the Federal budget. If the Federal budget fails to implement its most important social function, it means that the law on this budget unconstitutional.

So that is what serious conclusions can be reached, wondering about the lack of indexation of pensions, the replacement of the indexing one-time payment, etc.

Yes, the findings are serious. They, by the way, confirmed even by the decisions of the constitutional court of the Russian Federation, which were in the past.

For example, it is the decision of the constitutional court of the Russian Federation from February 15, 2005 No. 17-“On the complaint of a citizen Aborisova Praskovia Fyodorovna a breach of her constitutional rights, paragraph 8 of article 14 of the Federal law “About labour pensions in the Russian Federation”. This Definition stated that the Federal legislator “must correlate the decisions with the constitutional significant principles of pension provision and to act within international legal obligations of the Russian Federation. The Russian Federation as a party to the International Covenant on economic, social and cultural rights recognizes the right of everyone to an adequate standard of living for himself and his family, including adequate food, clothing and housing and to the continuous improvement of living conditions and agrees to take appropriate steps to ensure the realization of this right”. The Federal act of 14 Dec 2015 No. 359-FZ “On Federal budget for 2016”, providing clearly insufficient indexation of insurance pensions and social pensions, the lack of indexation of pensions for working pensioners, and suggests that appropriate measures to fulfil the right to adequate standard of living have not been included.

No, we have not respected the Constitution. There you have it. Serious business.

Now the main thing: what next? Then, of course, will be a one-time payment of 5 thousand roubles. Indexing, so now the promise will only be from February 1, 2017 at the rate of inflation by 2016 (government oriented around 6.5%). Of course, that will be indexed, only the pension that retirees receive today and will receive before the beginning of next year, that is a one-time payout will not be counted.

Would coax future retirees a one-time payment? Not a fact.

Rejoice, of course, “planted” anything. Some will say that it is “better than nothing”, others “black sheep — though wool a shred”. It is on the Federal budget.


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