Yanukovych is reverse Robin Hood - he steals from the poor to give to the rich
This Thursday, following orders from Yanukovych, the Verkhovna Rada passed in the first reading the draft law on cutting pensions, which, for some reason, the government is calling "pension reform."In reality, this bill has nothing in common with true reform...
This Thursday, following orders from Yanukovych, the Verkhovna Rada passed in the first reading the draft law on cutting pensions, which, for some reason, the government is calling "pension reform." In reality, this bill has nothing in common with true reform – it is the latest haphazard set of provisions that will complicate people’s lives, reduce and delay pensions.
Just 18 months ago, in the midst of the presidential election, Yanukovych delighted voters with stories about higher pensions and high social standards. He promised that he’ll never let the retirement age be increased, said that "we do not have the moral right to do this” and “I will never agree to this."
But he agreed! And in doing so he not only broke his promise to the people, he violated the Constitution of Ukraine. Article 22 says that new laws shall not be adopted that diminish existing rights and freedoms – the right to social protection, the right to obtain all types of pensions, the right to a decent standard of living.
The following are the key changes to the pension system that Yanukovych plans to introduce with this law:
1. The retirement age for women will increase substantially – by 5 years, from 55 to 60. The early retirement age for women was always seen as an important social benefit, given that the social mission of women is not limited to their work experience.
2. The retirement age for some men will increase. This includes scientific and pedagogical workers who will get a pension only at 62, civil servants at 62, military officers at 60.
3. The formula for calculating pension based on age will change. Now the formula will take into account the average salary not for one year, but three. As a result of this, everyone’s pension will decrease by 120 hryvnias.
4. The years of experience needed for a minimum pension based on age will increase by 10 years. The years of experience for a minimum pension will increase from 20 to 30 years for women and from 25 to 35 years for men.
Because of one pathetic law, thousands of potential pensioners that have already worked enough years to get a pension based on age will now have to work another ten years. What is this? How did citizens of Ukraine get sentenced to another 10 years of labor?
5. The years of experience needed to receive a disability pension will increase by 10 years. This is blatant mockery of more than 2.5 million people whose lives are already more difficult than others. Currently, a disability pension is issued after a minimum of 2 to 5 years of work experience, and now this will increase from 5 to 15 years.
Another surprise is planned for people of group II and III disability. Earlier they had the right to choose between a pension based on disability or age. Now they need 30-35 years to get a pension, which negates the possibility of choosing between different pensions.
6. Procedure for calculating pensions for scientific and pedagogical workers will change. For men, such pensions will be paid at 62 if the person was engaged in research for at least 20 years. There is no allowance for additional years worked.
7. The minimum length of service for military officers will increase by 5 years (from 20 to 25 years). Officers can now receive a military pension only after reaching the general retirement age of 60. Even with the increase in the length of service, between the real retirement age and 60 there is a gap of approximately 10-15 years when they are left without support from the state.
Of course they’ll find work, but the point is that their constitutional rights are being violated. Let me point out that once they find another job, as before, 40% of their salary will go to social funds. But the years of service and years of work can’t be added to get a pension! So, what happens? Former officers essentially are being pushed to work illegally?
8. The principle for calculating pensions for working pensioners will change. There are 2.6 million such people in Ukraine. Now their pensions will be calculated solely based on years of work, without taking into account their last salary. Therefore, every two years pensions for working retirees will increase by a meager amount (approximately 16 hryvnias). For working retirees, pensions will be recalculated in connection with an increase in the subsistence minimum only after they are no longer working.
9. Introduction of private pension funds. This isn’t just an attempt by Yanukovych to shift responsibility for paying pensions from the government to private business, it’s a major scam: the state doesn’t plan to guarantee the contribution made to these private funds. It looks as if once they collect the last kopecks from people, all these funds may repeat the sad fate of trusts in the 1990s, which disappeared quietly along with their owners and investors’ money.
10. For people under 35, the situation with pensions is unclear. In theory, the second level of the pension system was introduced for them, which provides for salary deductions of 2% to go to special accounts, with a gradual increase to 7%.
11. Fictitious decrease in pensions for civil servants and restrictions on super high pensions. The law proposes limiting the size of pensions for civil servants to 80% of their salary from which the relevant premiums were paid. Meanwhile, for 90% of citizens, their pensions are on average 45-50% of their salaries.
There is also a proposal to limit the maximum pension to 10 times the subsistence minimum (currently 7,640 hryvnias). But there is no risk for VIP seniors: either deputies from the pro-government won’t support this norm, or it will be cancelled by the Constitutional Court, which also protects the interests of the current government.
12. Negligible reduction in the budget deficit of the Pension Fund. Vice Prime Minister Tihipko has estimated that this “pension reform” will cut the budget deficit of the Pension Fund in 2011 by 211.6 million hryvnias, and after the law is adopted, reduced expenditures of the pay-as-you-go pension system in 2012 will amount to 2.5 billion hryvnias.
Don’t tell me the government can’t find other ways to reduce the deficit of the Pension Fund by such a relatively small amount other than robbing all pensioners and increasing the retirement age to almost the average life expectancy?
The estimated amount of savings is ridiculous compared to the amount of money that is taken out of Ukraine and put in offshore accounts every year under the avoidance of double taxation agreement between the former USSR and Cyprus. In just the period of May 2010 to May 2011, domestic banks transferred $32.6 billion to the accounts of offshore companies in Cyprus. This is 105 times the annual “savings” to be derived from Yanukovych’s draconian pension law. By the way, the Verkhovna Rada recently failed to pass the law repealing this shameful agreement and left the opportunity open for the oligarchs in Yanukovych’s entourage to dishonestly make money in Ukraine and take in abroad.
Ukraine loses hundreds of billions of hryvnias because of corrupt government procurement. Restoring basic order in this area would make it possible not only to balance the Pension Fund, but also potentially increase pensions and salaries for public sector workers. If this government returned the real cost of construction for just one Euro-2012 facility – the Olympic National Sports Complex in Kyiv – from 5 billion hryvnias to 2.1 billion hryvnias, as it was under our government, this would have been enough to not introduce any ridiculous “pension reforms” for two years.
The radical changes to the pension system initiated by the current president are obviously directed against the interests of the majority of the population. Yanukovych is behaving like Robin Hood in reverse – he’s stealing from the poor to give to the rich. Now the poor will work longer and harder and receive smaller pensions, while the rich will get richer through private pension funds and inflated costs of Euro-2012 facilities, and will accumulate dishonestly earned money on their offshore accounts overseas.
Is this the "better life today" that people voted for in the presidential election?
Obviously, the BYuT-Batkivshchyna faction in the Verkhovna Rada did not support this predatory "pension reform." As the opposition, we submitted an alternative bill on true pension reform. We propose unifying pension calculations and making them fair, without raising the retirement age or cutting pensions.
Our reform plan takes into account every important detail in calculating pensions: years of work, salary, working conditions. We propose creating a special support system for former farm workers, and those in the public, education, science, cultural, health care and other sectors. We also want to provide decent pensions to workers with professions that in the past were paid unfairly low salaries.
For these categories of workers, our law proposes a special mechanism for calculating, in addition to pensions, a state stipend from 30% to 100% of the subsistence minimum set by law for people with disabilities, depending on their position. It would also increase state stipends by 2% of the subsistence minimum established by law for disabled persons for people who have 25 or more years of experience in the given position, for every full year of such work over 10 years but not more than 150%.
We’re introducing this bill in order to finally balance the Pension Fund, and ensure that the government fulfills in a fair, clear and stable manner its fundamental responsibility – to pay its citizens decent pensions.
We have other important draft law that will help legalize salaries, optimize and make realistic all taxes, revive the country’s economy and finances. This is all necessary to build a functioning state system that encourages work, stimulates economic development, ensures a decent standard of living to its citizens and guarantees all social payments.
This package of laws has been in the Verkhovna Rada since the time of our government. Back then our opponents blocked them just as they’re doing now. But people need to know that this isn’t a hopeless case, that there is an alternative to Yanukovych’s absurd "pension reform" that is highly professional, which address problems not at the expense of the interests of the people, but by establishing order in the country.
It’s become obvious that Yanukovych’s social policy in no way corresponds to his beautiful campaign promises. Politicians, like any other person, should be judged not by words, but deeds. I’m confident that we’ll fix all these current mistakes.
I will do everything I can so that only two pensioners in our country – Yanukovych and Azarov - receive the beggarly salary that the government today plans to give our people.