24 may 2012
Background material for the May 24, 2012 Government meeting (press release)
* PRESS RELEASE *
The following issues are scheduled for discussion at the Government meeting on May 24, 2012:
1. Implementing the Federal Budget for 2011
2. Implementing the Pension Fund Budget for 2011
The Federal Pension Fund revenue came from regular social security contributions at rates stipulated by the Federal Law On Insurance Contributions to the Pension Fund of the Russian Federation, Social Security Fund of the Russian Federation, and the Federal Fund for Mandatory Medical Insurance of the Russian Federation; inter-budgetary transfers from the federal budget; and other sources.
The 2011 revenue of the Pension Fund totaled 5.255,6 trillion roubles (1.5% above the budgeted figure), while expenditures totaled 4.922,1 trillion roubles (98.7% of the budgeted figure).
The amount of inter-budgetary transfers from the federal budget to the Fund, in accordance with the law, was 2.379,8 trillion roubles. Those included 281.9 billion roubles for state pension provision, pension supplements, grants, and other social benefits; 924.4 billion roubles to cover the Fund’s budget deficit; and 69.6 billion roubles to compensate for revenue shortfalls due to the reduced insurance premium rates.
The Fund has received full transfers from the federal budget to provide monthly payments and additional payments, including 335.3 billion roubles allocated to disabled persons, veterans, Heroes of the Soviet Union, Heroes of the Russian Federation, and other categories of citizens; 174.3 billion roubles to provide Maternity (Family) Capital benefits; 34.5 billion roubles to pay additional federal pensions; and 3.4 billion roubles for co-financing pension savings at the expense of the funds of the National Welfare Fund.
In 2011, the revenues of the Fund’s budget for financing the funded component of the labour pension totaled 418.1 billion roubles (0.2% above the budgeted figure), including 369.9 billion roubles (up 1.7% on the budgeted figure) of insurance premiums for the funded component of the labour pensions and 23.5 billion roubles income from the temporary investment of pension savings and the disposal of assets acquired with pension savings.
In 2011, pension savings grew by 177.5 billion roubles to 1.444,5 trillion roubles as of January 1, 2012. Of that amount, 1.189,8 trillion roubles were transferred in trust, including 1.164,8 trillion roubles transferred to the state managing company Vnesheconombank. Of the remaining 247.3 billion roubles in pension savings, 150.2 billion roubles went into temporary asset holdings as permitted by law.
The Fund’s expenditures on the payment of labour pensions totaled 3.755,3 trillion in 2011, or 99.95% of the budgeted figure.
As of February 1, 2011, the insurance component of old age, disability and survivor pensions was indexed at 8.8%; as of April 1, 2011, social pensions were increased by 10.27%.
As a result of the above measures for raising pensions, the average annual old-age labour pension increased by 710 roubles (8.7%), to 8,876 roubles as of the beginning of 2012.
From April 1, 2011, monthly payments to disabled persons, veterans, and other categories of citizens were increased by 6.5%.
By the beginning of 2012, the average monthly income of disabled persons and WWII veterans, including the established payments and additional benefits, reached 25,000 roubles (up 2,000 roubles); the average income of military widows who receive two pensions was 18,700 roubles (an increase of 1,500 roubles).
The Maternity (Family) Capital benefit was increased by 6.5% to 365,700 roubles in 2011.
In 2011, the Fund’s budget had a surplus of 156 billion roubles in its pay-as-you-go account; and a surplus of 177.6 billion roubles in its funded account.
3. Implementing the Social Security Fund Budget for 2011
The Social Security Fund revenues for 2011 came from insurance contributions and other taxes at rates stipulated by law, federal budget allocations and other sources.
The 2011 revenue of the Social Security Fund totaled 558.6 billion roubles (up 9.5% from the adjusted budgeted figure) and expenditures, 497.6 billion (98.4% of the budgeted figure).
In 2011, the Fund received 313.6 billion roubles in insurance premiums for mandatory social insurance against temporary disability or maternity, up 2.0% on the expected amount (90.3% in 2010).
Revenue from the aforementioned insurance premiums increased mostly due to a 112.9 billion rouble (1%) rise in the insured gross payroll as compared to the projected figure, as well as an increase in the contributions from insurants who had either paid reduced insurance premiums or had been exempt from paying them before 2011.
Taxable gross wages (up to 463,000 roubles per worker) accounted for 80.5% of gross payroll in 2011.
In 2011, 98.9% of social security contributions were collected, up from the target of 97.5%.
The lump sum tax (payable under a simplified taxation plan, an imputed income tax or a similar option) payable to the Fund, totaled 6 billion roubles, 0.4% above the target (85.6% in 2010).
The Fund received 71.5 billion roubles in premiums for mandatory social insurance against industrial accidents and occupational diseases, 3.2% above the estimated amount (up 5.0%, in 2010). The premium collection ratio was 97.6% against an estimated 97.0%. The weighted average rate of insurance premiums across industries equaled 0.52%, or 0.01% above the target.
The bulk of the Fund’s expenses, 350.8 billion roubles, or 70.5% of its total expenses (72.0% according to the 2010 report) were allocated for the payment of temporary disability allowances, prenatal and maternity benefits, child benefits until 1.5 years of age, and other mandatory social insurance benefits for temporary disability or maternity. In 2011, expenses for the above totaled 101.0% of the adjusted budget quarterly breakdown (102.0%, according to the 2010report).
Spending on temporary disability allowances fell by 30.8 billion roubles or 16.9%, as compared to 2010, to 151.7 billion roubles (1.6% above the plan) mainly due to fewer temporary disability days financed by the Fund.
The Fund’s spending on maternity allowances grew 15.5% over 2010, to 185.5 billion roubles, or 0.8% above the plan.
In 2011, insurance compensations and other expenses for insurance against industrial accidents and occupational diseases totaled 60.0 billion roubles, which is 94.8% of the plan (95.4% according to the 2010 report), mainly due to a drop in the number of temporary disability days resulting from industrial accidents and occupational diseases, as well as in the number of lump sum payments and monthly compensation, against the planned level.
In 2011, the federal budget financed the allowances provided by the Fund to citizens who were exposed to radiation as a result of nuclear disasters or tests as well as for state assistance in providing health resort treatment to certain categories of citizens, rehabilitation equipment for disabled persons, and child benefits until 1.5 years of age for non-working parents. The Fund received a total of 75.1 billion roubles for these purposes (99.5% of the plan) from the federal budget.
However, in most cases, the money was not spent entirely (only 92.5% of the amount on average), due to late federal budget transfers. The remainder will be spent by the Fund during this year.
In 2011, the federal budget also provided funds to cover a deficit in the Fund’s budget in the amount of 65.4 billion roubles and to compensate for the Fund’s revenue shortfalls in the amount of 5.4 billion roubles.
The Fund also paid, through the Federal Mandatory Medical Insurance Fund, a total of 18.0 billion roubles (92% of the plan) for prenatal, natal, and postnatal care as well as clinical observation over the first year of life, of which 96.3% was spent.
The Fund will use the remaining 0.7 billion roubles for the same purposes in 2012.
The Fund fulfilled its 2011 budget with a surplus of 61.0 billion roubles. The current deficit in temporary disability insurance and maternity insurance at 26.7 billion roubles was covered by federal budget transfers.
4. Implementing the Budget of the Federal Mandatory Medical Insurance Fund for 2011
The 2011 Federal Mandatory Medical Insurance Fund income came from mandatory health insurance contributions and other taxes at rates stipulated by law, federal budget allocations and other sources.
The revenue for the budget of the Federal Mandatory Medical Insurance Fund totaled 348.4 billion roubles (3.7% above the budget target). The budget’s expenditures totaled 310.4 billion roubles (92.4% of the budgeted figure).
The Fund received 326.6 billion roubles in premiums for mandatory medical insurance, or 260% above the 2010 level of 91 billion roubles, mainly due to rate increases from 1.1% to 3.1%.
The Fund also received 591.7 million roubles in special programme taxes (the unified tax collected according to the simplified tax system, the unified tax on imputed income, and the unified agricultural tax).
The federal budget provided 21.14 billion roubles for special purposes (non-repayable receipts) to the Fund’s budget, allocated for the following purposes:
The Fund’s expenditures totaled 310.4 billion roubles.
The Fund’s allowances for leveling-off the financial status of regional Mandatory Medical Insurance Funds (within the basic programme of mandatory medical insurance) totaled 95.9 billion roubles (6.8% above last year’s target due to channeling 6.1 billion roubles of the Fund’s normalised insurance reserves for this purpose).
The Fund transferred 18 billion roubles (100% of the plan) to the Social Insurance Fund to pay for prenatal, natal, and postnatal care and infant’s clinical observation over the first year of life.
The following allocations have been made under the Priority National Project Healthcare:
Under the Federal Law On the Federal Mandatory Medical Insurance Fund Budget for 2011 and the Planning Period of 2012-2013, the Fund provided subsidies to regional Mandatory Medical Insurance Funds in 2011 and 2012 to co-finance regional healthcare modernisation programmes and to finance programmes aimed at modernising federal healthcare institutions.
In 2011, 215.9 billion roubles were allocated for that purpose.
Of that amount, 190.4 billion roubles were earmarked for regional healthcare modernisation programmes and fully disbursed for the following projects:
Since no programmes aimed at modernising federal healthcare institutions were implemented during 2011, the 25.5 billion roubles earmarked for that purpose will be spent in 2012 instead.
In 2011, the Fund’s budget had a surplus of 38 billion roubles due to insurance premium collections of 12.5 billion roubles above the budget target as well as the 25.5 billion rouble reserve allocated for spending on programmes to modernise federal healthcare institutions and regional healthcare modernisation programmes.
5. Draft federal law On Introducing Amendments to Article 28 of the Federal Law on Non-Profit Organisations and the Federal law On Forming and Using Endowments at Non-Profit Organisations.
6. Draft federal law On Introducing Amendments to the Russian Labour Code and Article 1 of the Federal Law On Electronic Signatures
This bill is aimed at simplifying the legal procedures between the employer and the employee performing a job away from the employer’s location (distance working).
The new regulation provides an opportunity for an electronic contract with distance workers and allows them to be employed without making a relevant entry in their labour books if they do not wish to do so. In this case copies of their employment contract and the order terminating their employment shall be valid proof of their employment record.
The bill also introduces a requirement to use an enhanced electronic signature for signing, changing or terminating contracts with this type of worker as well as for other employment documents that need to be signed by both parties as required by the Labour Code.
The bill allows an employee who performs a job away from their employer’s location to plan their working hours and spare time as they deem necessary unless otherwise stipulated by their contract.
The new regulations added to the Labour Code allow a distance worker to submit electronic copies of the required documents to the employer while being hired; likewise, the employer shall be able to send back electronic copies of documents as required by Article 68 of the Labour Code (corporate rules, local by-laws covering the worker’s activity and a collective agreement) and use an enhanced electronic signature in this case.
As a reference rule, the bill amends the Federal Law On Electronic Signatures to allow the use of electronic documents between an employer and a distance worker.
7. Draft federal law On Ratifying the US-Russian Agreement on Simplifying Visa Regulations
This bill has been introduced by the Ministry of Foreign Affairs.
The US-Russian Agreement on Simplifying Visa Regulations was developed to fulfill the commitments made in a Joint Statement by the Presidents of the United States of America and of the Russian Federation Regarding Cooperation on Visa Issues issued following a meeting in Deauville in May 26, 2011, and confirmed by an exchange of notes on November 1 and 19, 2011.
The agreement is designed to create more convenient conditions for traveling between Russia and the United States, at promoting the development of cultural ties between the two countries and at perfecting the legal framework for bilateral relations.
The agreement includes clauses that cover the issue of business, private, cultural and tourist visas following direct invitations from the receiving party for up to three years allowing an uninterrupted stay of up to six months. The consideration of a visa application shall be limited to 15 calendar days.
The agreement provides for the issue of multiple entry visas for up to one year allowing for short official trips (up to three months from each entry date).
8. Draft federal law On Introducing Amendments to the Federal Law On State Social Aid
This bill introduces amendments to the Federal Law On State Social Aid that create a legal framework for providing state social aid to low-income Russians based on a social contract between a citizen and their local social security office or agency.
A social contract stipulates the rights and responsibilities of the individual and the relevant social security agency regarding the provision of social aid, including the type and size of assistance, the procedures and timeframe for its provision as well as the procedures for changing or terminating the social contract.
The social contract is concluded on the basis of a social adaptation programme, drafted by the authorized agency jointly with the individual to include a series of measures aimed at surviving a difficult life period such as a loss of job, professional training, subsistence farming or self-employment.
The period for providing state social aid shall be set from three months to one year depending on the social adaptation programme.
The bill includes the possibility of extending the period for providing state social aid in cases envisaged by regional regulatory acts.
The provision of state social aid based on a social contract does not entail the termination or denial of state social aid provided in accordance with this Federal Law without concluding a social contract.
The Government shall work out a procedure for approving a methodology for evaluating the effectiveness of state social aid provided on the basis of the social contract.
9. Draft federal law On Introducing Amendments to Article 24 of the Federal Law on Pension Provision to Persons who Fulfilled Military Service, Service in Organs of Internal Affairs, Fire Service, Drug Control Service or Service in the Penal Enforcement System and their Families.
This bill was introduced by Russia’s Defence Ministry.
According to the Federal Law On State Pension Provision in Russia, former military conscripts whose disability results from a military injury, are entitled to the privilege of receiving two pensions – a disability pension and a standard retirement pension with a fixed base portion of the insurance pension.
At the same time, these privileged retirement terms are not granted to retired military who have served under contract and have suffered a disability during their service. If they have not earned the right to a pension granted for length of service, they are only entitled to a disability pension. If they become entitled to a standard retirement pension, it comes without a fixed base portion of the insurance pension.
This difference in retirement terms does not have any reasonable justification, as confirmed by the Constitutional Court’s stance on the principle of equality with regard to pension provision, and shall be terminated.
The new bill accomplishes this goal. It calls for granting an additional benefit to former military who have served under contract and have suffered a disability during their service once they reach the retirement age of 60 for men and 55 for women. This additional benefit shall be equal to the base portion of the standard insurance pension. This move should restore equal retirement terms for all former servicemen who have disabilities resulting from injuries while serving in the military whether they have served by conscription or under contract.
10. Forming the Russian Government Presidium
A draft resolution calls for forming the Russian Government Presidium and lists its potential members.
May 23, 2012
* Press releases by the Department of Press Service and Information are based on the materials submitted by the federal executive bodies for discussion by the Government of the Russian Federation.