The government in a € 500m hole

Erol Rizaov

The announced new reforms of the pension system for removing the horrifying black hole in the budget of 500m euros annually, which comes to almost a quarter of the state treasury, are more dangerous for the falling of Zoran Zaev’s government than the change in the name of the state. The first announcements that such reforms to rescue the budget by extending the retirement age of 67 years and at the expense of stagnating pensions, which would mean their real reduction, is the biggest threat to great dissatisfaction and total loss of public confidence in the government and its reforms.

Instead of reforms, domestic or by the World Bank, anyway made long-standing, it’s best for the government to conduct a comprehensive investigation as to who and why it bankrupted the largest fund in the state, and instead of the richest it has been the poorest for years. The first thing to be cleared is to recognize and deny the long-imposed lie that pensioners receive pensions and raises thanks to governments, prime ministers, ruling parties. The truth is that pensioners receive their money that they set aside in their Fund and thus helped the country that regularly used this money, and that is very bad and inconvenient. Or, more precisely, employees, who for years have allocated a percentage of their pay for a more relaxed retirement, if judged by the average of the use of the right to a pension, they have been robbed by the state, but also by other scammers, since much of their money ended up in private pockets.

The State Pension Fund has long been neither a solidary nor an economic category, as foreseen by the law, yet a bottomless bag. In the Fund, exactly to the last denar, or more precisely to the last deni in today’s counter-value, it is known to every employee how much money they has allocated while working. On this basis, the pension is determined by the fact that the law by limiting the highest and determining the lowest pension expresses the solidarity determination. This means that even those who have invested most into the Fund and those who have invested the least, acquire the right to a pension by getting what is theirs. If it is so, and it is, why is there such a hole in the Fund? Where did the money go of the retired citizens, who have spent their whole working lives paying off their debts properly, now they should feel like ballast, a burden to the whole society, and not those who spent their money.

The average life expectancy in Macedonia is 72-74 years for men and women, and if so far, pensions are on average used eight to ten years from those who have directly exercised the right to a pension, and a few more years if, after their death, a family member uses the pension with a reasonable amount of one-third, it follows that in very few cases, pensioners get back what they have set aside during their working life. These data exist in the Fund but have not yet been subject to a more serious public analysis, or were not available to the public because the solidarity category has evidently been turned into a great injustice to people who regularly spend 30, or 40, and even more years, investing money in the state fund.

That injustice would be greater if the limit for the right to an old-age pension is moved to say 67 years, and the average life expectancy remains 72-74 years. It may be appropriate for countries where quality of life and health care are at a higher level and where people live on average 80, even over 80 years, as in the Scandinavian countries. But in Macedonia, it would be fatal and extremely inhuman – from work to the cemetery. In that case, retiring at 67, the average period for using the old-age pension would be just five to seven years.

And now the law provides an opportunity for those who want to continue their work after turning 64, can work up to their age of 67 years. It’s the right choice and that’s good. But what should those who have difficult working conditions, who are employed from their 18-19 years of age, immediately after their secondary education? If those people have to retire at the age of 67, it would mean that they have to work for 49 years, or almost half a century. There are no other words for this except for ‘lawful crime’.

Prior to any reform, a serious investigation should take place as to what happened with 15 percent of shares belonging to the Pension Insurance Fund from all state-owned privatizations, including the ‘golden chickens’ that ended up in private hands. If these companies today earn millions of profits, the Fund should receive an equally significant amount each year from dividends. However, the information kept confidential says that the most valuable shares have been sold “legally” on the stock exchange, but under very dubious corruptive circumstances, at a price level. If we add to this how many new pensioners with intervention of the policy and adopting anti-economic laws are forced into the pension fund to receive pensions, and for that they did not fulfill the conditions, it will reveal how the pension fund has been destroyed for years. A great injustice has been done to all who regularly pay for peaceful days in their retirements, but also crime to the state treasury, which should cover the mistakes of politics.

Meddling in various leveling of pensions to the detriment of pensioners is the activation of a social nuclear bomb. Pensions support whole families, including unemployed young people. Whether they wanted to admit or not, those retirees have become a strong motive to respect and to accept those ‘white haired’ citizens more than usual.

And another question to the government. There were some promises that every citizen who has reached the age of 64 will receive a minimum pension, regardless of the fact that he/she has not worked. An extraordinary idea known worldwide as a social retirement. Only the proposer did not say whether this political pre-election, or post-election activity should be paid by current and future pensioners. If so, this is the latest example of how the hole in the pension fund was dug. They say when you fall into the hole, the first thing you need to do is stop digging, because you are falling even deeper.