Disputed law for the increase of pensions in May, the Fund asks what the quarter is

The Pension and Disability Insurance Fund addressed the Ministry of Finance and Social Welfare with a request for clarification of the terms from the December amendments to the Law on Pension and Disability Insurance, which introduced an extraordinary adjustment of pensions in May and September, "News" from that Fund reported.

Due to the growth of gross earnings due to the "Europe Now" program and significantly higher inflation, pensions could be 10 to 15 percent higher in May.

In December, the Assembly adopted amendments to the Law introducing the harmonization of pensions on May 1 and September 1, as well as the Democrats' proposal to increase the minimum pension by 36 percent from September 1, at the proposal of the Democratic Front MP. However, in the first proposal of the DF MP, it was written that the pension is adjusted quarterly every three months, i.e. additionally on April 1, September 1 and October 1, and then, after consultation with the Ministry of Finance, the proposal was changed so that pensions are adjusted every four months.

The problem is that this subsequent change was entered in one part of the amendment, but not in the other that defines the method of adjustment, so it remains that the pension in the quarter is adjusted with the growth of gross earnings and inflation with the data from the previous quarter. As the reconciliation is now done every four months, it is unclear for which period wage growth and inflation will be compared, in order to obtain the percentage of the pension increase.

That is why "Vijesti" asked the PIO Fund whether, during the adjustment from May 1, comparisons of the growth of gross wages and inflation in the first quarter of this year compared to the last quarter of the previous year will be made, that is, for September 1, comparisons from the second quarter will be made. with the first quarter.

"Article 2 of the Law on Amendments to the Law on Pension and Disability Insurance amended and supplemented Article 58 of the Law on Pension and Disability Insurance, and it is prescribed that the adjustment of pensions, as well as the value of the pension for one personal point, shall be carried out from January 1, May 1 and September 1 of the current year, based on statistical data, with the movement of consumer prices and average wages of employees in the territory of Montenegro in the previous quarter compared to the quarter preceding it. Due to the impreciseness of the norm, and for the proper application of this legal provision, we turned to the Ministry of Finance and Social Welfare to clarify the period covered by the term quarter, in the sense of the mentioned legal provision, bearing in mind the prescribed method of adjusting pensions, which does not include all periods between two adjustments . Also, in this sense, it is necessary to specify the period for which the parameters are taken for calculating the percentage of pension adjustments, for the adjustments that are carried out according to the Law on May 1 and September 1, 2022, as well as on January 1, 2023. they stated from the PIO Fund.

Pensions are adjusted by multiplying by 0,75 the percentage that is higher - growth of gross earnings or inflation, and by 0,25 percent, the lower percentage of the two.

The Fund explained that the adjustment from May 1 would refer to the May pension, which is paid around June 20.

All pensions increased by at least 10 percent, minimum by 50

The growth of the average gross salary in January was 12 percent, while the aggregate inflation for the first two months was 6,2 percent. If such a ratio were to be maintained for the first quarter, the May pension would be increased by 10,6 percent.

However, in March there was a record increase in the prices of fuel and food, which is why inflation in March could have an increase of more than ten percent, which would affect the final increase in pensions to be significantly higher.

The Democrats' amendment foresees a 36 percent increase in minimum pensions from September 1. At the end of last year, the minimum pension amounted to 147 euros, so the plan was to reach exactly the amount of 200 euros with this increase. As the DF amendments on new adjustments in May and September were added subsequently, the increase of 36 percent will be calculated added to all these adjustments. So that the minimum pension in September could be between 220 and 230 euros, that is, about 50 percent more than last year.

The PIO Fund told "Vijesta" that the budget for this year for the payment of all pensions is 459,05 million euros, and that this planned amount is sufficient for the realization of all obligations.