Transcript of the beginning of the meeting:

Dmitry Medvedev: Good afternoon, colleagues. Today, we are holding this  meeting of the board to review the results of the last 12 months, and naturally we will talk about our goals. But, before we do this, I would like to thank everyone who worked during this incomplete year for their efforts in this extremely important and influential national sector. The Ministry was reinstated in May 2012, and it immediately started working at full capacity. I believe that this decision has justified itself because there were many debates at that time. We asked the advice of the trade unions and of other agencies. But the quality of regulation of national labour and social processes has improved as a result. This does not mean that we have achieved major successes in every area, but I’m talking about precisely the quality of regulation here.

 Individuals and the quality of life in this country are the focus of all ministerial projects. In reality all Russian citizens are concerned about many of the issues that are addressed by the Ministry and its agencies.

This includes demography, work remuneration and pensions and of course social security. Each of these aspects is unique in itself, and it would be incorrect to say that some of them are more important than others.

And now, I would like to say a few words about the results. As for social indices, they are quite good as compared to our more difficult periods. The number of newborns has increased, and mortality rates have decreased. Poverty levels have plunged three-fold compared to the 1990s. All this is directly linked with improvements in the labour market and with the sustained growth of the average income. We must discuss this in a straightforward and candid manner because, despite the difficulties of the crisis period and despite other complicated processes inside the global economy and the Russian economy, it should be admitted that, unlike the situation in many other countries, incomes are rising. The income base is another issue.

Changes in these indices are linked with more substantial state investment in healthcare, family-support projects, as well as motherhood and childhood support projects. We never neglected our social promises, not even during the most difficult period, in late 2008 and early 2009. Nor did we walk away from our obligations. Perhaps we failed to assume certain obligations, which we could have assumed under different conditions. But all state obligations were met unfailingly. The entire system of our work for the next few years must be based on this, because Russian society expects higher social standards, the creation of cost-effective and, of course, high-paid jobs, as well as improvements in the quality of life.

Over the past six months, or maybe even more, we’ve made a list of various objectives which the ministry should accomplish. As for general objectives, this indeed includes demographic indices, which I have already mentioned, and pension reform and greater social security for the people. We have approved state programmes, which will become a financial instrument and the main planning tool for their implementation.

I would like to single out several key aspects.

First, the entire Government, including the Ministry of Labour and Social Security, prioritise measures to boost birth rates and average life expectancy. We must support families that have a second and third child. Since January 2013, monthly payments for the third and subsequent children were introduced in 50 regions with the most difficult demographic situation. These payments will be made until the child turns three. I would like to ask you to focus on employment opportunities for women raising young children. The heads of regional social agencies and deputy governors for social issues are present here, and I would like you to hear this, too. We must do our best to prevent a drastic reduction of incomes in families where one parent is on childcare leave, and women should be given an opportunity to work and raise their children.

Social contracts are another way to support families with three or more children. The state is prepared to provide families with small amounts of start-up capital. By skilfully using this capital, by investing it in private farms or some other relatively small business, these families might move up to another weight class, and they would no longer be classified as needy families. The experiment was conducted in several regions over two years. Since 2013, this has been used throughout Russia.

Reducing deaths from major diseases, alcoholism, drug abuse, smoking, and traffic accidents is also high on the agenda. Speaking about accidents, we don’t have much to brag about. There are several difficult decisions related to increasing liability that we need to make. The loss of life resulting from traffic accidents was unfortunately up 7.5% in 2012 compared to previous years and up 6.5% over the first three months of 2013 compared to 2012. These numbers look bad, and it’s not clear why this is happening. I recently discussed this with experts and senior officials at the Ministry of Interior, and issued corresponding instructions. I would also like social services and the Ministry of Social Security to pay attention to this issue.

My second point is about raising salaries. This is the key goal for the department and the budget sphere. The programme to gradually improve the remuneration system at the government (municipal) institutions to 2018 and the corresponding roadmaps have been adopted. We need to complete all the preparatory procedures and clarify provisions on wages based on the quality of work, as well as new pay regulations for senior officials of agencies. Therefore, I request that the Ministry of Labour prepares guidelines for drafting industry standards, labour ratings, and effective contracts. Regional regulations should also be adopted as soon as possible.

Here’s my third point. The strategy of long-term development of the pension system was approved in late 2012. The goal is to make the average pension equal to three times the subsistence minimum within the next 15 years. Not an easy task, but we can do it based on our current capabilities.

We need clear and straightforward financial mechanisms. This is exactly why we are discussing a new pension formula now. It’s imperative to make investing in pension funds a lucrative proposition. We should develop a private pension system and make it effective, reliable and off-limits to fraudsters.

Yesterday, the Government approved a draft law that increases the responsibility of private pension funds. In addition, the principle behind pension calculations should encourage people to continue to work in the future, but, of course, this is a private issue that the people will have to decide for themselves.

There are other important issues which probably should be discussed at a ministerial meeting. Of course, we will continue this discussion in the Government and the expert panel as well.

My fourth point is about improving the labour market. A modern economy needs highly skilled employees who can work as a team; therefore, the professional training system needs an overhaul. We have two years to develop 800 professional standards.

Employers are willing to be customers here, they have said so many times to you and to me. The Government should give people the opportunity to improve their skills or learn new ones. We need an effective system of social insurance in place to provide people with sufficient protection in the event of disability.

On a separate note, I would like to touch on the problems faced by people with disabilities. This year, we are beginning a programme to create 14,000 new jobs for people with disabilities annually. It’s important that this work be done properly at the regional and municipal levels. As you may recall, the first phase of the Accessible Environment programme was completed in 2012.

I would like to remind you that we concluded the first stage of the Accessible Environment, 2011-2015 programme that runs through 2015. We have implemented pilot projects in a number of regions, including the Republic of Tatarstan, the Saratov Region and the Tver Region. We have also developed methodical recommendations and a pattern of regional programmes for forming an accessible environment. These programmes have been prepared in 70 regions and are now being agreed upon. It is very important to adopt them, so that people with disabilities can use transport means and visit such public places as stadiums, cinemas and libraries. Of course, it is extremely important for children with disabilities because this barrier-free environment opens completely new possibilities.  

Fifth. Currently, the State Duma is examining the governmentally approved draft law on the foundation of social services. We have elaborated and discussed this document over a lengthy period. The document touches upon the interests or rather the essential needs of over 30 million people or over one-fifth of the population, and includes a number of new legal, organisational and financial mechanisms that should drastically change the social security system. But this is a two-way street – not only should the state change its approaches, but the population should also know its rights. The state should have information on the people’s social situation and create and conduct a permanent unified record-keeping system. Given the current level of communications, it is much easier than it was 10 or 20 years ago. It is possible to provide an individual approach and targeted support to the needy in this way.

I hope that these tasks and a great many other tasks that I have not mentioned will fall within the competency of the Ministry and all of the social groups in the short term. Thank you!

Maxim Topilin (Minister of Labour and Social Security): Mr Medvedev and board members! In 2012, the executive bodies at all levels responsible for issues of labour, employment and social security carried out considerable work. We began to implement the instructions to the Government included in the President’s executive orders dated May 7, 2012. Within short terms, we prepared a programme and strategic documents outlining the social sector’s future development. In 2012, we achieved positive results for the majority of the fundamental social development indicators – the demographic situation has improved, real population incomes have increased, real wages have grown and unemployment has decreased.

In my speech, I will highlight three basic areas of the Ministry’s work in 2013.  

Regarding demography, we achieved the highest demographic indicators in the history of modern Russia last year. Almost 1.9 million children were born in Russia. The total population grew by over 300,000 people. The population decline practically dropped to just 2,600 people. We have not seen such an indicator in over 20 years. We have achieved a sound indicator in early 2013. In January-February, almost 302,000 newborns were registered, or 2.5% more than during the same period in 2012.

I want to stress that the Government continues to develop and to introduce social security measures for families with children. Last year, we prepared a new programme that began to be implemented on January 1, 2013. This is a programme for supporting regions that have a complex demographic situation and introduce benefit payments for a third child, which Mr Medvedev mentioned. To date, over 3,000 families with children received these benefits, which were established for them. And I would like to ask the regions to intensify their work in this area. I want to underscore that the aggregate sum of monthly payment for one family for three years will amount to about 250,000 roubles on average across Russia. This is compatible with the level of maternity capital that we established some years ago. Of course, we understand that the drop in the number of women of reproductive age will lead to a reduction in the birth rate in the future, but we should maintain the growth rate of the aggregate birth rate coefficient and mitigate its consequences. Regional demographic programmes should become the main instruments in this respect. The Ministry has prepared recommendations for the regions after the Government discusses these programmes and they will be directed to regions at the earliest possible date.

We continue to develop proposals on the further development of tools stimulating the birth rate. First of all, we are working on issues concerned with extending and improving the maternity capital programme that ends in 2016 under law. We believe that these measures should be differentiated depending on the demographic situation in a specific region.  

We are also working on the issue concerned with extending the pensionable service that is included in the retirement pension calculation. This period does not exceed three years – only 18 months are included when each of two children is born. We propose to examine the possibility to extend this period to go over to programmes supporting families with three children. In our estimate, these measures will make it possible to increase the number of births of a third and of a successive child by 35,000-40,000 per year.    

In the field of labour relations the key task in the near term is to fulfil the Government’s resolutions on raising the pay for certain categories of public sector workers.

The target for this year is to complete the preparation of all the regulatory documents together with the ministries in charge of healthcare and education, and of course in cooperation with the regions. The main regulatory documents are basically ready but they need some finishing touches. That applies to pay rates, wage differentiation and agreeing roadmaps with the regions. Within the Ministry’s frame of reference just a few days ago we completed the discussion of all the roadmaps concerning pay rises and the transition to an effective contract for social security bodies, for social workers. This work is also being pursued in coordination with the federal ministries on issues of healthcare and education.

We believe that the huge pay differentiation – by a factor of about 16 – is becoming a very important issue. We have started tackling these problems in public sector organisations and the Government has passed normative documents in this field. I would like to suggest to our social partners present here that in preparing the general agreement, which is what we are doing now, we need to deal with these issues and both employers and trade unions should commit themselves under the new general agreement to thinking about what instruments could be used to narrow the gap in wages in the commercial sector.

Preparing proposals on a phased increase of the minimum wage is another key task in the field of payment. We are working on these matters together with a task force from the State Duma. That task cannot be solved earlier than 2018. We must set the benchmarks and determine the rate of the increase of the minimum wage until 2018. As Dmitry Medvedev has said, at the initial stage of the work on professional standards we held a difficult but constructive dialogue with our social partners. We expect professional communities and employers to be more active. We have completed the preparatory stage of this work, we have issued all the regulatory documents and the draft professional standards and qualifications requirements. By the summer of this year, hopefully, we will begin issuing and discussing the early documents on these matters. The problem of occupational safety and reducing industrial injuries is still very serious. These indicators have fallen by nearly a third over the past seven years, but the level of occupational injuries in the country remains high and is 4-5 times higher than in other countries to which we usually compare ourselves. There is great untapped potential there and within the framework of the pension reform we should prepare the key draft law that both employers and unions expect from us, the law on special evaluation of workplaces. We have started the discussion of the concept of that draft law and we will have to agree the main provisions of it in the coming months (April-May). How well it is written will determine the system of compensation for workers in hazardous and dangerous jobs and the system of early retirement pensions. It is a key draft law that we must prepare and submit to the State Duma along with the draft law On the Budget for 2014-2016.

Perhaps the most difficult task last year was the development of the long-term strategy for the pension system. We have held a lot of consultations and negotiations with partners. The document has been passed and today we are working to implement the strategy. Mr Medvedev has also said that we are discussing the so-called pension formula. This too is causing a lot of arguments and discussions. I would like to stress again that we are open to dialogue and, following the Prime Minister’s instructions, we are conducting an active public debate.

In introducing a new pension formula our expectation and our plan is to encourage our citizens to take up legal employment, legalise their insured length of service and legalise their earnings. That, in our opinion, should determine the future size of pensions and this makes it very important for us to improve all the instruments and mechanisms with our partners, with the representatives of unions and employers.

The further development of mandatory social insurance against temporary disability and in connection with maternity also involves the solution of several tasks. I think that today we have made substantial progress in that direction. While two years ago the shortage of funds for insuring temporary disability was nearly 100 billion roubles, this year we expect to implement the social insurance fund budget in that area practically without any deficit. This has been made possible partly by the adoption of several laws which introduced amendments to the allocation of temporary disability allowances and stimulated the work of the Social Insurance Fund with insurers. We believe that our results are satisfactory.

This year the Social Insurance Fund is due to complete the pilot projects which are underway in eight regions. We are going to switch to a system of paying temporary disability and other benefits not through employers but directly through the Social Insurance Fund, i.e. to switch from the offset principle to normal insurance. Based on the results of these pilot projects we will report to the Government on further activities in this area.

Beginning from 2012 state employment policy is being implemented by the executive bodies in the Russian Federation under the new conditions. Financing of active policy measures has been delegated to the constituent entities of the Russian Federation, it has become part of their brief. We are keeping a close watch on what is happening in the regions and I cannot say that all the regions have implemented this task properly. In some regions the financing of active employment programmes has fallen and the quality of services has deteriorated. I ask the constituent entities of the Russian Federation to pay more attention to implementing these tasks. We should not be complacent because unemployment is low, we must be prepared for any developments and must support the employment service and develop active programmes of support for unemployed citizens and indeed other citizens. The Government has submitted to the Duma draft laws whereby the employment service would provide assistance to, for example, elderly people, that is, the range of employment agencies’ services will expand.

Mr Medvedev in his speech set the task of contributing to the employment of people with disabilities. In 2013, 2014 and 2015 we need to create 14,200 jobs for disabled people every year, all the methodological documents, all the policy documents have been developed by the Ministry and handed down to the regions. We are currently conducting educational work in all the constituent entities of the Russian Federation and we want the regions to actively join in with these programmes.

I would like to draw your attention to the fact that these programmes should be implemented in close collaboration with Russian associations of people with disabilities if we are to achieve the targets we have set.

I have to say that the employment level among disabled people remains poor. Only 30% of working-age people with disabilities are in work today, so the number of jobs our programmes envisaged is grossly inadequate. Based on the experience of implementing this programme so far we expect to start preparing proposals on extending it after 2016, and we should begin preparations for that without delay.

As regards our work to regulate the use of the foreign workforce in the Russian Federation, the situation today is such that no contributions are being paid to the Social Insurance Fund and the Mandatory Medical Insurance Fund for foreign workers. This means that the labour costs for employers who employ foreign labour is much lower. We are preparing a package of legislation to rectify that situation. We believe that the cost of labour for employers must be the same, that there should be no differentiated approach in this respect. We have practically agreed with all the ministries on the guidelines in this area and I hope that over the next few months such draft laws will be prepared and discussed with our social partners. The social partners are also involved in this work.

While we're on the subject of social security I would like to stress that the Government, just a few days ago, submitted to the State Duma a draft law on the basic principles of social services. We have worked on this draft law for a fairly long time because we tried to discuss it in maximum detail with all our partners. It has been repeatedly discussed in the regions, with the non-governmental organisations and representatives of charitable organisations. We have gone through several stages of discussion and in my opinion it is a very good law. Of course it will be finalised during the debates at the State Duma, amendments will be proposed and introduced, but we plan to adopt this law this year so that the regions can apply it in practice beginning from next year.

The law envisages new mechanisms of working with citizens, a transition to individual needs-based programmes, public-private partnerships and the possible involvement of the private sector in the delivery of social services.

To develop that sector we are, together with our colleagues from the other ministries, drafting laws to amend the Tax Code, the land legislation in order to attract more private capital into the social services sphere. I think it should become the priority of our activities because the Russian population, as we all know, is ageing, the number of elderly people will increase and it will be very difficult to deliver quality services to our citizens without private-public partnerships.

As I said, we have completed the work with the Russian regions on the roadmaps which envisage higher wages for social workers and reforms in that sector. We estimate that in 2013 the pay of social workers will increase by an average of 25%. Of course that figure will differ from region to region because they are starting from different bases, but on average, by the end of the year it should be about 50% of the average regional wage. We are starting at 35%, so it would be a significant increase and I ask all the regions to do this work properly. We understand that not all the regional budgets have made provisions to allocate the money for these purposes, but that work is moving forward and we are discussing this theme with the Ministry of Finance and I have no doubt that we will meet that target.

I would also like to report to you that we have prepared a draft law which has already been submitted to the Government which establishes the right of the constituent entities of the Russian Federation to provide benefits to citizens based on their levels of income.

Today the regions do not have this authority, they are acting on their own, but there is no uniformity in their approach. Such a draft law has been prepared and will also be introduced at the State Duma shortly.

Speaking about social security and the services available to people with disabilities I must remind you that last year we ratified the Convention on the Rights of Persons with Disabilities. This was a key event last year. Today we have prepared a draft federal law which would harmonise federal legislation with the provisions in the UN Convention. This involves amendments to 34 federal laws. We plan to introduce it to the Government in the autumn before it goes to the State Duma. I would like to draw the attention of the constituent entities to the fact that we have asked you to review your own body of legislation with this in mind. So far we haven’t received a complete response on this matter and I want you to harmonise your regional legislation with the Convention. We can provide methodological assistance. Our approach, as set forth in the draft law I mentioned, is already known to you and you can use it for your own legislation.

Next year will be an important year in implementing the Accessible Environment programme. Dmitry Medvedev has said that we have carried out some pilot projects. We have prepared all the necessary documents and materials for accessibility maps and approaches to certification of the facilities. All the documents for the Accessible Environment programme which provide the guidelines for work in the regions are ready.

In 2014 and 2015, we envisage the allocation of 9 billion roubles to finance regional programmes in cooperation with the regions. These kinds of resources have never been allocated before. I would like the constituent entities to prepare their programmes very thoroughly because this will determine the contributions from the federal budget.

I would like to say a few words about reforming the system of medical and social disability tests. We have practically finished, within the framework of the Accessible Environment programme, preparing the regulatory documents that alter the system of certifying the degree of disability and propose the introduction of so-called letter codes based on international classifications. We have sent all the documents to the relevant agencies for medical and social expert review. We set the target, Mr Medvedev, of switching to the new classifications that will be far more transparent and more simple for everyone. The questions that you put before us connected with reducing the number of complaints about the objectivity of determining the category of their disabilities… We believe that we will achieve a positive result here. I would like you to note the fact that we are doing this in cooperation with the all-Russian societies and it was only after the all-Russian societies told us that our approach is sound and the methods that we tested in some regions (in three pilot regions) have yielded positive results, it was only then that we started spreading the programme all across the country. I believe that we will be able to work more positively in this area with the people who find themselves in this situation.

Esteemed participants in the meeting! The workers in our sectors see the Executive Orders of the President of May 7, 2012 and the Policy Priorities of the Government of the Russian Federation to 2018 as the main policy documents for our work going forward. Extensive practical activity lies ahead, many documents are to be adopted at the federal, but especially at the regional level. In 2013 we are planning to prepare 27 draft federal laws on the modernisation of the pension system, the development of labour legislation, labour protection, social insurance and social security. I hope that we will work together closely. We have been receiving many proposals from the regions and we will continue to work in the same manner. I thank all those present for the work carried out last year. Thank you.

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Dmitry Medvedev’s closing remarks:

First of all, today is April 12 and I congratulate all of you on Cosmonauts Day. Although those present are probably far removed from the problems of the development of the space industry in our country, the tasks we are taking on and discussing are in some ways cosmic in their scale.

I would like to say just a couple of words about the Minister’s report. He has touched on all the key positions. Speaking about those institutions that have acquitted themselves well over the past few years, we should of course treat them with care. Maternity capital, a project I claim some credit for. We have indeed managed to improve the overall demographic situation through that tool. It has worked, unlike some other tools which may not be working as well. We should appreciate what’s been accomplished and submit proposals for further improvements. I expect from my colleagues in the Government and from the Ministry final proposals on our plans after 2016.

There are some high-profile issues and I would just like you to understand that decisions will need to be taken soon. One such problem is the rates for individual entrepreneurs. We discussed the issue this morning with Ms Golodets (Olga Golodets, Deputy Prime Minister). In any case, the work on this issue must continue. We are in consultations with our colleagues in parliament, with the trade unions and with all the expert communities. Apparently we should move towards a differentiated approach for those entrepreneurs and self-employed citizens with low incomes. And this should be a priority. But I’m waiting for the final proposals on this matter.

The pension formula is a very important issue. Naturally, there will be further public discussion after the final proposals have been prepared. It should be, in any case, a dialogue and not a monologue, I stress that; and the new pension formula should emerge from this dialogue. Of course it should stimulate legal employment and legal earnings, as has been correctly pointed out here. This is the goal the state has set.

I would like to go along with the Minister’s remarks about the employment services and in general the subject of employment in the country. We should not be complacent even though the employment situation is quite favourable. It is much better than in the absolute majority of European countries and other countries in the world, but this is no cause for relaxing. So, they must work, we must control the trends in this area, adopt the necessary decisions and programmes and I would like to urge the regions to proceed in this way. Dear colleagues, pay close attention to this because any increase in unemployment naturally increases tensions. That’s one thing. The second thing is that we live in an interconnected world; all the problems that exist, for example, in the European economy, will inevitably impact our economy, because the economy in general is contracting and we should prepare in advance to deal with the various problems that will crop up. That applies to individual cities and individual industries where tensions are increasing.

And last, but certainly not least: we should of course pay attention to increasing social worker’s salaries. This is also a priority for the Ministry. We should proceed in accordance with our plans. I would like all the regions to join in this work and monitor the figures in each region of the Federation. These people are our colleagues and we should make sure that their comparatively modest wages are increased under the decisions that have been taken. This makes a huge difference for a large number of people.

I think we should try to end on a positive note. So I suggest that we go into the awards ceremony.

* * *

After the meeting, Prime Minister Dmitry Medvedev awarded state awards to social sector workers and honorary certificates to the winners of the first national Best Professional Skills-2012 competition.

State awards were granted to:

Order of Honour

Zoya Artamonova – Head of the Kaluga Department of Social Security;

Order of Friendship  

Ivan Dubov – Assistant to the Minister of Labour and Social Protection;

Badge of distinction For Exemplary Service

Galina Petrusevich – Leading Consultant to the Kaliningrad Region Ministry of Social Policy;

Medal of the Order For Service to the Motherland, Second Grade

Marina Lyashenko – Head of the Department at the Kaliningrad Region Employment Agency;

Title of Merited Social Security Worker of the Russian Federation

Olga Oparova – Nurse at the Gorodetsky Psychoneurological Nursing Home;

Nasima Samatova – Head of the Ordzhonikidzevky District Directorate at the Ministry of Labour and Social Protection of the Republic of Bashkortostan in Ufa;

Title of Merited Economist of the Russian Federation

Valentina Babikova – Head of Department, Chief Accountant of the Republic of Komi Social Development Agency;

Honorary certificates conferred on:

Alexander Lymar – Winner of the first national Best Professional Skills-2012 competition in the Best Electrician category;

Nikolai Maznev – Winner of the first national Best Professional Skills-2012 competition in the Best Bricklayer category;

Maxim Osipov – Winner of the first national Best Professional Skills-2012 competition in the Best Welder category;

Ramil Salikhov – Winner of the first national Best Professional Skills-2012 competition in the Best Heavy Hauler (KAMAZ) Driver category;

Alexander Svidritsky – Winner of the first national Best Professional Skills-2012 competition in the Best Breakage Face Miner category.