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Publication date: 17.05.2024
active and purposeful military lawyer with more than 4 years of experience
Suspension of the employment contract and appointment of a pension: what you need to know
SITUATION
In connection with the armed aggression of the Russian Federation against Ukraine, I went abroad and received temporary protection in one of the EU countries. My employment contract was suspended by the employer. What will be the consequences of the suspension of the employment contract during the appointment of a pension? Does continuous work experience affect the size of the future pension?
COMMENT
In connection with the armed aggression of the Russian Federation against Ukraine in 2022-2023, according to the Office of the United Nations High Commissioner for Refugees, more than 8 million Ukrainians went abroad and more than 5 million people took advantage of national temporary protection programs in Europe.In the situation described above, several issues are raised that are on the border of labor and pension law, and therefore, in order to provide an answer, we will conditionally divide it into several sub-issues and dwell on each of them in detail:
• Suspension of the employment contract: is such a period of work included in the insurance length of service for pension purposes, if the record of work is contained in the employee's work book?
• Continuous length of service: what are the consequences for the appointment of a pension?
• What are the ways of acquiring insurance experience for pension assignment, in case the existing insurance experience is not enough for pension assignment in the future and the person does not work in Ukraine?
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Suspension of the employment contract: is such a period of work included in the insurance period for the purpose of pension
The principles, principles and mechanisms of the operation of the mandatory state pension insurance system, appointment, calculation and payment of pensions are regulated by the Law of Ukraine dated April 9, 2003 No. 1058-IV "On mandatory state pension insurance" (hereinafter - Law No. 1058).
The first part of Article 24 of Law No. 1058 defines that insurance length of service is the period (term) during which a person is subject to mandatory state pension insurance and for which monthly insurance premiums are paid in an amount not less than the minimum insurance premium.
That is, individual periods of work are included in the insurance length of service necessary for the appointment of a pension, carried out exclusively on the basis of paid insurance contributions from the employee's salary.Peculiarities of the labor relations of employees of all enterprises, institutions, organizations in Ukraine, regardless of the form of ownership, type of activity and branch affiliation, representative offices of foreign economic entities in Ukraine, as well as persons who work under an employment contract concluded with natural persons (hereinafter - employees), during the period of military service conditions defined by the Law of Ukraine dated March 15, 2022 No. 2136-IX "On the peculiarities of labor relations under martial law" (hereinafter - Law No. 2136).
Suspension of the employment contract is a temporary termination by the employer of providing the employee with a job and a temporary termination by the employee of the performance of work under the concluded employment contract in connection with the armed aggression against Ukraine, which excludes the possibility of both sides of the employment relationship to fulfill the obligations stipulated in the employment contract.
The suspension of the employment contract does not entail the termination of the employment relationship.
Reimbursement of wages, guarantee and compensation payments to employees for the period of suspension of the employment contract is fully entrusted to the state that carries out armed aggression against Ukraine (Article 13 of Law No. 2136).
Since at the time of suspension of the employment contract, the employee's salary is not accrued, the employer does not pay the single social contribution for such an employee, the specified periods of suspension of the employment contract are not counted towards the insurance length of service required for the appointment of a pension.
Continuous work experience and pension assignment
The concept of "continuous work experience" comes from the legislation in the field of pension provision of the times of the USSR and Ukrainian SSR.
Thus, the Law of the USSR of July 14, 1956 "On State Pensions" established a supplement to the state pension in connection with old age and to the state pension in connection with disability from 10 to 20%, depending on the length of continuous service of the employee.Starting from January 1, 1992, the concept of "continuous work experience" is not included in the legislation of Ukraine.
Today, continuous insurance experience does not provide any benefits and allowances when assigning and/or calculating the amount of a pension.
All periods during which a person is subject to mandatory state pension insurance and during which monthly insurance contributions in an amount not less than the minimum insurance contribution, calculated in months regardless of breaks, are included in the insurance experience required for the appointment of a pension - part one Article 24 of Law No. 1058.
Ways of acquiring insurance experience for the appointment of a pension, if the existing insurance experience is not enough for the appointment of a pension in the future and the person does not work in Ukraine
One of the principles of mandatory state pension insurance is the principle of voluntary participation in the system of mandatory state pension insurance of persons for whom insurance premiums are not/were not paid, as well as the right to additional payment of insurance premiums under the contract on voluntary payment of insurance premiums for mandatory state pension insurance — Article 7 of Law No. 1058.
The grounds and procedure for voluntary participation in the mandatory state pension insurance system are defined in Article 12 of Law No. 1058.
From December 4, 2022, persons who have reached the age of 16 and do not belong to persons who have been assigned a pension in the solidarity system have the right to voluntarily pay insurance premiums for mandatory state pension insurance.
The agreement on the voluntary payment of insurance premiums for mandatory state pension insurance is concluded with the Pension Fund in electronic form through the Unified State Web Portal of Electronic Services (hereinafter - Diya Portal), in particular using the mobile application of the Diya Portal (hereinafter - the Diya mobile application), or through the web portal of electronic services of the Pension Fund by joining the standard agreement on the voluntary payment of insurance premiums for mandatory state pension insurance (hereinafter - the Agreement).That is, the Agreement can conclude:
1) any person;
2) a person who has reached the age of 16;
3) a person with a qualified electronic digital signature;
4) a person who does not receive any type of pension (due to age, disability, in connection with the loss of a breadwinner, etc.);
5) a person for whom the employer does not pay insurance premiums (for example, in the case of suspension of the employment contract or being on leave without salary for the period of martial law).
Information about the payment of insurance premiums is entered into the personalized accounting system by the Pension Fund automatically upon the fact of crediting the funds, which is notified in the personal account of the insured person on the web portal of the Pension Fund's electronic services.
The sums of paid insurance premiums are credited for the month in which the funds were deposited into the account of the Pension Fund of Ukraine.
Persons who voluntarily paid insurance contributions in the manner and amounts established by law to the solidarity system and/or the accumulative system of pension insurance have the right, under the conditions defined by Law No. 1058, to receive a pension and social services at the expense of the Pension Fund and/or to receive a lifetime pension or a one-time payment from the funds of the accumulative pension insurance system — part three of Article 8 of Law No. 1058.
An agreement on the voluntary payment of insurance premiums for mandatory state pension insurance can be concluded by a person for his own benefit or for the benefit of a third party.Importantly! When concluding the Contract, it should be remembered that the contract is concluded for the future, that is, it is not about "buying" the insurance experience of previous periods.
According to the contract, the insurance period is acquired according to the principle "one month of the contract - one month of insurance period".
This means that from the moment of concluding the Agreement, the payment of insurance premiums for each month of insurance period takes place in that month, the possibility of paying insurance premiums for several months of insurance period in advance is excluded.
