Will indexation protect pensioners from impoverishment? |
According to the decree signed by the President on February 8 this year, he received an additional salary for seniority labour pensioners (civil servants, military and special rank persons…) proposals on the indexation mechanism of their pensions National It will be discussed in the assembly.
“Labor on pensions” Law Labor and Population Social Ministry of Defense (AASMN) all types from January 1, 2023, according to the draft amendment of pensions indexing mechanism will be applied. I mean, unit indexing will be done.
So what’s the difference and will the increases match current inflation?
AASMNfrom “Turan” was told that the amendment to the law is another support for the welfare of pensioners: “Under special conditions pension paid to the monthly pensions of recipients 10 interest, also paid to other pensioners during the year 20After the financial assistance of AZN 0 is included in their pensions, the final amount will be indexed according to the annual growth rate of the average monthly salary. For example, 400 manats pension and during the year 20From the new year, the amount of 0 manat financial aid recipients is 416.7 manat (400+200/12) will be accepted and calculated with an increase of the indexation percentage.
The Ministry emphasized that unit the indexation mechanism will stipulate a continuous increase in the pensions of retired persons under special conditions: “End 10 the pension of the vast majority of persons from this category increased by a maximum of 70 percent. The pensions of people retiring on general basis increased by 98 percent during this period as a result of indexation.
The Ministry emphasized that unit the indexation mechanism will stipulate a continuous increase in the pensions of retired persons under special conditions: “End 10 the pension of the vast majority of persons from this category increased by a maximum of 70 percent. The pensions of people retiring on general basis increased by 98 percent during this period as a result of indexation.
The ministry added that after the adoption of the project, the pension of persons receiving care allowance will increase more compared to the current mechanism: “Also, the indexation of all pension will be applied to the amounts – both the maintenance supplement and the insurance part”.
The Ministry also informed that this project does not apply to retirement conditions and appointment under special conditions.
Gubad Ibadoglu, one of the economists, does not value this process as an increase, as in the official propaganda: “For this year, 50 manats paid once every three months to pensions will be paid 16 manats and 66 kopecks every month in 2023 by dividing them into months. They present it as an increase, know that it is not an increase. There is no increase, there will be indexation next year as well.”
Economist Rashad Hasanov told RFE/RL that today general labor pensions are indexed within the existing conditions: “There is a connection between the pension increase for those retiring under special conditions and the increase in the average monthly salary in that sector. That is, if the persons belonging to that category have retired and do not work according to the legislation in force, after two or three years in the field in which they work Salary if it increases, the pension amount is recalculated taking these increases into account. The pension of others is indexed once a year according to the growth rate of the average monthly salary.
According to the expert, after the change, the pension of those who retire under special conditions will be indexed once a year: “Instead, the calculation caused by the increase in wages in that sector is stopped.”
He noted that in world experience, more indexation mechanisms are used: “The philosophy of indexation is to prevent the risk of impoverishment of pensioners, and therefore this indexation is usually inflation associated with the level. But that’s not the case with us. After the changes to the law in 2017, this is done not according to inflation, but according to the growth rate of the average monthly salary.
According to R. Hasanov, if we look at the official figures reflecting the growth rate of inflation in 2022, we will see that these figures are lower than the growth rate of the average monthly salary: “This means that pensions may increase by 1-2 percent more than inflation. According to official figures, inflation 13 percent, average Salary and officially increased by 14.1 percent. But in reality, we assume that inflation is more than 30 percent. Looking at the issue from this point of view, indexation will not protect pensioners from impoverishment.