Policy on Payment of Public Sector Pensions and Benefits for the First Quarter 2004

23 January 2004 Policy on Payment of Public Sector Pensions and Benefits for the First Quarter 2004 This policy applies to public sector pensioners registered with the Pension Administration of the Ministry of Finance. Public sector pensioners registered since 1990 in the Kurdish administrations, to the “private sector” or contributory pensioners and family benefit recipients of the Ministry of Labour and Social Affairs, and to the recipients of the benefit for Anfal victims, disabled and families of martyrs in the Kurdish areas will be paid under different arrangements to be administered by the responsible Ministries. Background: Previous Pension Rates Type of Pensioners Quarterly pension under previous regime, ID Fourth quarter 2003 pension payment, ID Full pension- More than 25 years service 24,000 90,000 plus Ramadan bonus of 30,000 Full pension-More than 15 years service 15,000 90,000 plus Ramadan bonus of 30,000 Beneficiary payment - 1 dependent** 15,000 90,000 plus Ramadan bonus of 30,000 Beneficiary payment – 2 or more dependents*** 22,500 90,000 plus Ramadan bonus of 30,000 **Beneficiary payment – 1 dependent, refers to an individual who is the beneficiary of a deceased civil service pensioner and supports 1 dependent *** Beneficiary payment – 2 or more dependents, refers to an individual who is the beneficiary of a deceased civil service pensioner and supports 2 or more dependents First Quarter 2004 Pension plan The Minister of Finance has begun a reform process by increasing the level of payment for each pensioner and introducing greater differentiation between levels of payment. The new system makes civil service grade on retirement a consideration in addition to years of service and number of dependants. The combination of these factors allow for a greater range of payment rates while incorporating new retirees throughout 2004. In the first quarter the Pension Department will establish and pay the minimum amounts for each category ( see table below ), while announcing the plan’s intention to reward years of service and civil service grade upon retirement with gradually higher payments. The announcement will not include the exact rate for each category, as more time is needed to collect the necessary data from pension files. Instead, the Pension Department will use the first quarter to review their records, categorize individuals, analyze the results, and modify to meet budget considerations. When a pensioner’s category is established, they will be paid in the second quarter for any difference above the minimum back to January 1. First Quarter pension payments Type of Pensioner Proposed first quarter 2004 pension payment, ID minimum levels Full pension- More than 25 years service 125,000 ID Full pension-More than 15 years service 110,000 ID Beneficiary payment - 1 dependent 95,000 ID Beneficiary payment – 2 or more dependents 100,000 ID Procedure for payment of pensions and benefit Financing. Provision of funds to pay pensions and benefits will be the responsibility of Ministry of Finance officials, acting in accordance with the established policy, through the Treasury account. Payment . Payments will be executed through the banking system where possible. In these cases the funds will be sent to the relevant bank and the bank will make the payments to the pensioners against an official list of pensioners provided by the Pensions Administration. A notable change in the first quarter of 2004 is the return of pension payments in the banks for hundreds of thousands of pensioners paid most recently at the Central Pension Department. If is it not possible, pensions will be paid through pay sites staffed by the Pensions Administration of the Ministry of Finance and benefits will be paid through pay sites staffed by the Ministry of Labour and Social Affairs. The pay site should be designed to be secure, convenient and efficient, and minimise the time that customers spend in queues. The Director General of Pensions, Ministry of Finance will issue a circular to all Pensions offices setting out details of the payment of pensions. Verification of identity . Each pensioner and benefit recipient shall be expected to show three forms of identification to qualify for payment, including the pension ID card and the ID card. In exceptional cases, the director of the pension administration or the director of the MOLSA office may authorise payment on the basis of two forms of identification, providing proper records are kept of such cases. Any person caught using false ID to obtain a pension or benefit by fraudulent means shall be subject to criminal charges. Verification of payment . Upon receipt of the pension, each pensioner should sign the official list of pensioners against their name in order to provide verification that payment has been made. Payment of Backpayments and Recovery of Excess Pensions. Employees who have not received their full pension or benefit payment for any part of 2003 shall be entitled to payment of the balance. Any double payment of the previous quarter’s pension or benefit shall be deducted from the first quarter’s pension or benefit payments. Accounting for previous quarter payment . The Pension Administration of the Ministry of Finance and the local office of the MOLSA shall provide information to the local Treasury Office on the number of pensioners and benefit recipients paid in the previous quarter. Information should include funds received, funds paid out, number of pensioners/benefit recipients paid and the balance remaining. Unused funds will be redeposited in the bank from which they were withdrawn and a receipt filed with the local Treasurer. This information should be sent to the Director General of Account in Baghdad to allow a full accounting of all payments made. Points of Contact for Further Information: John Hanley, Adviser, Ministry of Finance hanleyj@orha.centcom.mil