08.01.2025

WHAT RETIREMENT BENEFITS DOES THE COMPANY OWE US?

Recently, the deputies signaled that in companies with state participation, workers receive 30 salaries as compensation upon retirement. They proposed a 12-salary cap to avoid a huge gap in retirement benefits for some employees.

According to the Labor Code, every worker upon termination of the employment relationship, after having acquired the right to a pension, is entitled to compensation from the employer in the amount of 2 gross wages.

However, some people are entitled to 6 gross wages. With the latest change in the Labor Code, a new way of paying the compensation of 6 salaries was provided.

They are due if you have 10 years out of the last 20 years of service with the same employer, the requirement that it be continuous has been dropped.

Before the change in the Labor Code, only workers with 10 years of continuous service with the same employer were entitled to the six salaries upon retirement.

Today, if for some reason the worker had to terminate his employment contract with this employer, but in the last 20 years he has acquired 10 years of work experience with him, he will again be entitled to receive the six wages.

Thus, if a worker has been unemployed but returns to his old employer, he will not be disadvantaged and must have accrued the ten years - regardless of whether they are not consecutive.

The change also applies to work for several employers from the same group of enterprises. That is, even if the workers are transferred to another company, if it is from the same group, they are again entitled to the six wages when they became entitled to a pension.

If the internship was acquired with the same employer, but the worker used unpaid leave, he is also entitled to the compensation. There is no obstacle for the employee to have worked for another employer during the unpaid leave.

However, the retirement benefit can exceed 2 or 6 salaries, as these are only the minimum thresholds. In collective labor agreements or with decisions of the Council of Ministers, benefits can be many times greater than usual in the private sector.

In addition, there are some exceptions that concern teachers and those working in the system of the Ministry of Internal Affairs and the Ministry of Defense.

The Law on Preschool and School Education provides that upon termination of the employment relationship with pedagogical specialists upon retirement, who in the last 10 years of their working experience held the position of a pedagogical specialist in a state or municipal institution on a budget basis, compensation is paid in amount of 10 gross wages.

For employees under the Law on the Ministry of Internal Affairs, compensation is paid in the amount of as many monthly salaries as the number of years of service, but not more than 20.

How is the amount determined?

The amount of the compensation is determined on the basis of the gross labor remuneration that the person received for the month preceding the one in which the basis for the corresponding compensation arose, or the last monthly gross labor remuneration received by the employee.

It includes both the basic salary and the additional wages, which are of a permanent nature.

What conditions must we meet?

The second important condition to receive a retirement benefit is that you have acquired the right to a pension. The first is if you have acquired the right to a pension for length of service and age.

In 2024, in the third category of work, which is the most common, women must be 62 years and two months old and have 36.5 years of experience, and men - 64 years and 7 months, and their experience must be 39.5 years.

In addition to acquiring the right to a pension for length of service and age, compensation is also due when the right to a pension is acquired with insufficient service. Then the requirement is that the person has at least 15 years of actual insurance experience and has reached the age of 67.

The employer also owes the compensation if the employee meets the conditions for granting a reduced amount of pension for insurance service and age.

It is about the cases in which people have the necessary insurance experience for a pension and can retire up to one year earlier if they wish.

Then the pension granted in this order is reduced by 0.4% for each month falling short of the retirement age and is paid in a reduced amount for life.

Deadlines

The term for the payment of compensation is determined by law and stipulates that this should be done no later than the last day of the month following the month in which the employment relationship was terminated, unless another term is written in the collective labor agreement.

After this period, the employer also owes you interest on the late payment.

If the employer refuses to pay you the money, you have the right to seek your rights in court, and there is also a 3-year statute of limitations here. It begins to run from the day following the day on which the term for payment of the compensation expires.

It is important for workers to know that they are entitled to retirement benefits, regardless of the grounds on which their employment contract was terminated.

The leaves

In addition to wages, your employer also owes you compensation for unused retirement leave. However, it is only about accrued vacations in years for which the statute of limitations has not expired.

By law, workers must use their leave within two calendar years. If this does not happen, compensation must be paid for unused leave.

However, if the termination of the employment relationship of the person who will retire is in 2024, and the leave was for 2021 and was not used, then it is extinguished by statute of limitations, accordingly no compensation for unused can be paid leave upon termination of employment.

If a person retires in the middle of the year - for example in June 2024, and then their employment relationship ends, and until that moment they have not used any leave for the calendar year and by law have 20 working days, at the middle of the year they will has the right to compensation, which is proportional to the time he is considered to have worked for the calendar year.

This is one second of the leave entitlement, i.e. he will have to be paid ten business days.

In our country, there is a perception that as soon as a person fulfills the conditions for retirement, the employer must necessarily release him. The employer has the right, when an employee has reached retirement age and has the necessary experience, to terminate his employment with notice.

But the Labor Code and the Social Security Code do not require employment to be terminated in order to file for retirement or begin receiving a pension.

A person can continue to work and at the same time submit his documents when he has fulfilled the conditions of seniority and age.