Regional Meeting of the Network of Economic and Legal Experts from the SEE Trade Unions

The trade union legal and economic experts from the trade unions in Serbia (SSSS, UGS Nezavisnost), Croatia (SSSH, NHS, and HUS), Macedonia (SSM and KSS), Montenegro (SSCG), and Bosnia and Herzegovina (KSBiH) participated in the meeting that took place in OHRID, Macedonia, 11 -12 May 2011.

The trade union legal and economic experts from the trade unions in Serbia (SSSS, UGS Nezavisnost), Croatia (SSSH, NHS, and HUS), Macedonia (SSM and KSS), Montenegro (SSCG), and Bosnia and Herzegovina (KSBiH) participated in the meeting that took place in OHRID, Macedonia, 11 -12 May 2011.

Ms. Siri Relling – LO Norway, presented the achievements of the Project and project plans for the next steps. Mr. Eystein Gjelsvik presented the Pension system in Norway – financing, conditions for retirement and system functioning.

Ms. Enisa Salimović- ITUC/PERC SEE Office presented the information on the national round tables, held in Serbia, Croatia, BiH and Macedonia.

Before the meeting in Ohrid, all the participating countries in the Project prepared a new – unique model of their national documents about the reform of pension systems, developed on the base of the Questionnaire prepared by Mr. Hutsebaut. All revised national reports on pension systems and reforms where presented and discussed.

Mr. Martin Hutsebaut – EU expert in the Project gave mentor’s observation of the national situation, elaboration of the action-plan and of the main common claims. Afterwards he drew the conclusions from the national presentations and presented an outline of what could be considered as a model for the national pension systems. He also articulated which socio-economic policies were required in order to achieve such systems.

National presentations – with focus on TU positions:

Serbia: Principal striving of the CATUS Serbia and UGS “Nezavisnost“, as the representative trade union centers in Serbia, in terms of reform of the system of the pension and disability insurance are: (1)more efficient control and the collection of contribution for mandatory pension and disability insurance; (2) building appropriate control mechanisms to reduce grey economy, and in this regard appropriate amendments to the valid laws and regulations; (3) urgent establishment of the Central register of those liable for mandatory pension and disability insurance and beneficiaries; (4) appropriate amendments to the Law on the pension and disability insurance, with the aim that an employee who meets the retirement terms does not bear the consequences of his employer who failed to pay contributions for the pension and disability insurance; (5) identification of the ownership over the rehabilitation centers, spa centers, and other real estates and property intended for the improvement of the living standard of pensioners and allowing the Republic Pension and Disability Fund to manage the assets and property; (6) repossessing the parts of resources earned by the use and privatization of facilities, built by the resources of the Republic Pension and Disability Fund; (7) harmonization of pensions twice a year with the changes in costs of living and the average income in the territory of the Republic during the previous six months, in the percentage which represents the sum of 50% of increase and/or decrease of living costs and 50% of increase and/or decrease of income – harmonization in accordance wit the so called “Swiss formula”; (8) introduction of protective provision and/or extraordinary harmonization of pension in case the average pension is less than 60% of the average income in the Republic; (9) introduction of protective provision and/or extraordinary harmonization of the lowest pension in case that it is less than 25% of the average income in the Republic;

Croatia: Representatives of the trade union confederations are involved in working groups of the Government; it was agreed that a wide expert and public discussion will be carried out on all the aspects of the pension system in Croatia. The issue of pension reform has been included, on the trade union initiative, in the Decent Work Country Agenda between the ILO and the Republic of Croatia as a priority under the Agenda, to be tackled on a trilateral level. The position of trade union confederations has been agreed and we act jointly. We expect difficulties concerning the so-called privileged pensions – the trade union position is clear: everyone under the general regulation and the Government should decide if and to which groups it will grant certain bonus financed from the Budget. This is especially linked to the pensions of the “political elites”, which also has privileged conditions for achieving pension entitlements and way above the average amount of the pensions. It seems there is no real political will to change this and this is where we will have to persist in our trade union fight.

Montenegro: During the adoption of the Law on amendments to the Law on pension and disability insurance, it was first discussed about significantly different – more rigid draft text of the Law. The Federation of trade unions, in the attempt to prevent the adoption of such law, given that it was not aware of the solutions, organized a series of public debates and round tables, and then it sent its objections to all the parliamentary caucuses. On that occasion, the General meeting of the Federation took a clear position that, if such draft law is not removed from the procedure of adoption, the trade unions would organize public protests. After these reactions of trade unions, a new – innovated proposal of the Law on amendments to the Law on pension and disability insurance was submitted for adoption. The principle objection was that the proponent, Ministry of finance, drafted this law and submitted for adoption without any transparency in the process, and that there was no social dialog involved at all. The objections of the trade unions that were upheld: keeping 15 of pension contribution as a requirement for old age retirement (initially, it was proposed that this limit is raised to 25 years of pension contribution); requirement of 52 years of age for getting the right to family pension (the Government proposed age limit of 55 years); adoption of modified Swiss formula for the harmonization of pensions (it was proposed that the harmonization of pension is carried out based on changes in the living basket in Montenegro in the previous year); introduction of special pension contribution period for women who gave birth in duration of 6 months for every born child, but there were also other objections.

Macedonia: The Economic and Social Council was recently established, and it is expected that it begins with its functioning and that the social partners will be able to discuss many issues. Federation of Trade Unions of Macedonia and the Confederation of Free Trade Unions, supported by UNASM on 01/02/2011, submitted Initiative to the Economic and Social Council and to the Government of Macedonia for introduction of more retirement conditions. The procedure is underway. The trade union basic requirements are: (1) a provision should be inserted in the law which would define the terms of retirement /early retirement/, not only one as it is the case now /age/ (2) trade unions should have their place in the Management Boards of the Funds; (3) the costs of maintenance of the pension fund should be discussed, given that they are too big.

BiH: This matter is at the entity level. The strategy on the reform of pension system is drafted in the FBiH, and it foresees 3 pillars. Given that the elections are ahead of us, the matter of pension reform is put aside. In May 2010, RS adopted the strategy of pension system reform, which also provided for 3 pillars. The unemployment is huge in both entities, informal economy is vivid, collection of contributions for the Funds is insufficient, and the system of control of collection of contributions is ineffective. The Confederation of Trade Unions of Republic of Serbska still demands that the basic requirement for retirement be 40 years of working experience, irrespective of the age, that the worker can be entitled to retirement at the age of 65 and 15 years of contribution period, that the female insured person can get the entitlement to retirement with the 35 years of contribution irrespective of her age, free of any penalization, that the pensions are paid in accordance with the decision, not that the payment of pension depends on the resources in the Fund, and that the state has to guarantee the payment of earned pensions! Based on the current legal solutions, the worker bears the consequences of the employee who failed to pay the contributions and the Tax Administration did not control or sanction him, The objective is to reform the 1st pillar so that the pension system may finance itself. It is the position of Trade unions that the conditions for introduction of II pillar have not yet been met. We expect that all the social partners will agree and then approve the new Law.

Meeting conclusions and evaluation:

Colleagues expressed their satisfaction with the project and underlined the importance of the "know-how" which they had collected during the meetings: this knowledge allowed the trade unions to have a real influence on the pension-reforms in their respective countries.

The project resulted also in a broad cooperation between the trade unions themselves and led to common positions on pension reform issues.

The project also gave a boost to the influence of trade union experts inside their own organizations.

As to the final activities of the network in 2011 it was decided to update the national reports and to fill the remaining gaps during the summer months, to prepare a synthesis chapter on the model and the required policy steps (by Martin), to put this national reports and the synthesis chapter together in a report (by Martin), to print the report (organization: Enisa) and to plan for a joint Final Regional Conference in early December 2011 in Zagreb where the report will be presented.

Finally the meeting discussed the possibilities of a new project (2012-2014/ 15). Agreement was reached on the topics: "For a fair taxation system, financial and contribution’s discipline, elimination of corruption and fight against the informal economy."

The meeting was organised in framework of the LO Norway Project “Contribution of trade unions to the reforms of pension systems”

/Enisa Salimović, ITUC/PERC Office in Sarajevo