Taking early retirement due to staff reductions: legal advice

Is it possible to apply for early retirement if there is a reduction in staff? Let's find out in this article. Workers of pre-retirement age are now often faced with the situation of dismissal due to a reduction in staff. Some enterprises are closing due to the crisis, and many others are reducing production volumes, which inevitably leads to a reduction in staff numbers.

When citizens of pre-retirement age are among those being laid off, this poses a much greater problem for them than for other employees, since at this age it is difficult to find a new job. In this case, are they entitled to early retirement if they are laid off? In our article you will find the answer to this question.

How is an old-age pension assigned?

In order to obtain the right to receive an old-age pension, a citizen must:

1. Reach official retirement age.
2. Earn minimum experience.
3. Earn the minimum number of pension points.

More detailed information about retirement can be found in Art. 8 of Law No. 400-FZ of December 28, 2013 “On Insurance Pensions”.

Important! Currently, the generally established retirement age for men is 60 years, for women - 55 years. Despite the fact that there are prerequisites for an increase in this age, primarily from an economic point of view, and many analysts predict such developments in the near future, at the moment these figures are unchanged.

As for the other two conditions, the new principles of operation of the pension system set out in the law “On Insurance Pensions” provide for transitional provisions:

• the minimum required insurance period will be increased gradually from 6 years in 2020 to 15 years in 2024 (9 years in 2020);
• the minimum amount of individual pension coefficients, set at 6.6 from January 1, 2020, will increase annually to 30 by 2025 (13.8 points in 2020).

It should also be noted that the insurance period taken into account when assigning an old-age pension includes not only the periods during which the employer paid insurance contributions to the Pension Fund, but also non-insurance periods, for example, child care, military service on conscription, the period of registered with the employment service, during which unemployment benefits were paid. A complete list of such periods is presented in Article 12 of the Law “On Insurance Pensions”.

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Those who work in hazardous industries will be able to retire at the age of 50. Plus, the employer must pay professional pension contributions for such people for at least five years. Since 2014, about 7 thousand companies began paying pensions for employees, and 400 thousand Kazakhstanis became participants in this system.

We recommend reading: Revision of Time Limits under Article 228

— Already in 2020, the first opportunity appears, when persons employed in hazardous working conditions have reached the age of 50, have the opportunity, through the total accumulation of their pension contributions of 10 percent and those 5 percent whose professional contributions are paid by the employer, to buy a pension annuity from insurance companies. Today, on average, it takes just over 8 million in savings to purchase a retirement annuity.

Reduction of an employee of pre-retirement age

After an employee has been laid off at the initiative of the employer, he receives the average monthly salary from the employer for another two months. If at this time he was unable to find a new job and registered with the employment service, then he officially acquires the status of unemployed and begins to receive social unemployment benefits. This payment is guaranteed to a person for 12 months after his recognition of unemployed status. At the same time, the employment service is obliged to provide employment to an unemployed person, providing him with available vacancies from employers. It is worth remembering that an unemployed person can refuse the jobs provided to him a limited number of times, otherwise he will be deregistered at the employment center and will not be able to count on receiving a pension early if he is laid off.

When an employee of pre-retirement age is laid off, he may be granted an early pension if:

• they have already acquired the required work experience, for men it is 25 years, and for women it is 20 years;
• he is in unemployed status;
• there is no real possibility of his further employment;
• he has no more than two years left before retirement.

Only in this case can a person of pre-retirement age receive the right to receive an early retirement pension. It is also worth noting that employment authorities are more motivated to employ a person before offering him early retirement in the event of a layoff. The law on early retirement pensions assumes that this measure can be initiated by the employment center due to the lack of further employment opportunities for a person of pre-retirement age or due to the discovery of a disease in a person that prevents his ability to continue working. But the person himself has the right not to agree to this proposal if he intends to continue his working activity.

It is especially important to note that if, after early retirement due to staff reduction, a person gets a job again, then the payment of benefits to him will be stopped. An early pension is assigned before a person’s pension rights to an insurance pension become available.

Conditions

To switch to pension provision, citizens of the Russian Federation must take into account a number of conditions established at the legislative level:

• Reaching a certain age (for 2020 this is 55/60 years).
• Availability of the required number of points.
• Deduction of contributions to an extra-budgetary fund.
• Availability of official employment in the past period is not less than the period established by law.

If the conditions discussed above are not met, the person loses the right to pension benefits. The legislation also stipulates cases in which early dismissal of a citizen of the Russian Federation due to retirement is possible:

1. Liquidation of the organization.
2. Reducing the number of employees (downsizing).
3. Receiving disability (inability to fulfill one's obligations due to poor health).
4. Conducting activities in harmful or dangerous production.

Early registration of a pension in case of downsizing or liquidation of an enterprise

The instability of the current economic situation in our country has recently led to two negative consequences, affecting primarily people of pre-retirement age:

• reduction in the number of employees;
• liquidation of an enterprise (or termination of the activities of an individual entrepreneur).

In one way or another, many citizens find themselves without work and are forced to join the ranks of the unemployed who are registered with the employment service. The lack of employment opportunities allows for some of them, in the presence of legal requirements, to resolve this issue in another way.

Important! Citizens recognized as unemployed in accordance with the procedure established by law are given the right to receive an early old-age insurance pension, but not earlier than two years before the generally established age.

To process these government payments, several conditions are required:

1. Recognition of a dismissed person as unemployed.
2. Achieving insurance experience: for women - 20 years, for men - 25 (Articles 27 and 28 of the Law of the Russian Federation No. 173-FZ of December 17, 2001)
3. Onset of age category: for women 53 years old, men - 58 years old.
4. The voluntary desire of the dismissed subject to register it.

Let's consider the conditions affecting the receipt of this type of security.

To recognize a person as unemployed, you must:

• have an entry in the work book about dismissal due to staff reduction;
• be registered with the regional employment department in order to search for and obtain the necessary vacancy;
• do not refuse the offered job more than 2 times.

Based on current legislation, an individual who has been dismissed for this reason will retain the average earnings received at the enterprise (organization) for two months.

• It is paid by the previous employer.
• After this period, subject to registration with the employment department, he is paid a special allowance.
• Its amount is: in the initial 3 months - 75% of the average monthly salary, in the next 4 months - 60%, in the remaining 5 months - 45%.
• Next year, benefits cannot be lower or higher than the maximum levels established by the Russian government.
• Depending on the economic situation of the country, these criteria are periodically revised.
• Payments are made from the pension fund, replenished from budget contributions.

The essence of termination of a company's activities

Liquidation of an organization is a process that occurs voluntarily or compulsorily, and its result is the termination of the company’s work and the making of an appropriate entry in the register. Closing an enterprise has the following nuances:

• According to the law, the liquidation process takes place in several stages, with the obligatory recording of each of them in special documents. In most cases, management informs employees of its intentions.
• The law requires that employees receive severance pay.
• Liquidation is a form of reorganization of an enterprise that does not imply further activity.

For comparison, there are other forms of company transformation that involve further activities. These include the merger of a group of organizations, the accession of one company to another, a change in the organizational and legal form, as well as the separation of a legal entity or the division of a company into several parts.

Insurance experience

This concept means the total period of work or other activity during which contributions were made to the Pension Fund of the Russian Federation.

Other activities - time:

• completing military service;
• full-time studies in secondary and higher educational institutions;
• being on sick leave for health reasons, caring for a child or a disabled family member, etc. (Article 11 Law of the Russian Federation No. 173-FZ of December 17, 2001).

If this length of service is greater than the level established for registration of early state support, for each year of excess it is allowed to receive 2 weeks of benefits.

Its total payment period is limited to two years.

How can an unemployed person retire early?

A citizen who is left without work must contact the employment service to resolve the issue of employment. However, in the case where two years remain before the right to old-age payment arises, the issue can be resolved by assigning him early pension provision.

This is done only after a written request from the insured person and only with his personal consent.

Initially, the citizen is assigned the status of unemployed, then specialists from the employment service, if there are grounds for assigning such a person an old-age pension earlier than the established period, prepare the following documents:

• offer;
• certificate of periods counted in the insurance period.

These documents give the citizen the right to apply for early payment to the Pension Fund, where it will additionally be necessary to submit a number of documents.

In what cases does the established amount of pension payments change?

In some cases, the amount of the assigned pension may change. The amount of payments is influenced by factors such as the number of dependent persons, region of residence and others. In this regard, according to the law, the person receiving the pension is obliged to notify the Pension Fund of the following changes:

• number of dependents;
• place of residence in Russia;
• traveling abroad;
• employment or engaging in any similar activity for which insurance experience is accrued.

In case of employment, pension payment stops until the individual reaches the retirement age determined by law.

Deadlines and possibility of cancellation

On the recommendation of the regional department of the Department of Employment, early retirement benefits are assigned from the moment you apply for them at the ROPF.

From the beginning of state support, a person is removed from the unemployment register and also stops receiving special benefits.

The grounds for termination of payment of early old-age pension may be:

• apparatus employed;
• the age officially provided for receiving pension benefits (Article 19, Clause 7, Law of the Russian Federation “On Labor Pensions);
• opening your own business.

The pensioner must independently notify the regional department of the Pension Fund about all changes.

Areas of activity for early retirement

What should people who were not laid off do? Who can count on early retirement? Some categories of citizens have the right to receive payments before the onset of their old-age pension if they have had a certain job during their life. This type of work activity includes:

• underground works;
• activities associated with hazardous conditions in hot shops;
• if a woman works as a tractor driver or operator of construction and heavy equipment;
• if a woman works in the textile industry in difficult positions;
• workers of locomotive crews on the railway;
• truck drivers involved in technological processes in mines, ores, and so on;
• employment in expeditions, geographical and topographical campaigns, reconnaissance;
• logging workers;
• machine operators during loading operations in ports;
• work on ships and ships;
• drivers of transport that transports passengers (buses, trolleybuses, etc.);
• work on mountain ranges;
• activities related to the fishing industry (on ships, catching, harvesting);
• pilots;
• aircraft control;
• aviation engineering and technical staff;
• rescue work;
• activities in the Fire Service;
• pedagogical activities related to children;
• employment in health care (doctors, orderlies, nurses);
• stage activities;
• work in the Far North.

Pension amount in 2020

The calculation of early pension provision for unemployed citizens is similar to the principle of calculating regular old-age insurance payments.

To calculate the pension amount, the following formula is used:

SP = IPC x SPK + FV,

Where:

• SP—amount of insurance payment;
• IPC—sum of accumulated points;
• SPK—cost of individual coefficient;
• FV—basic amount.

The last two indicators are increased annually by the state in accordance with the level of inflation in the country. In addition, the fixed amount is initially set at an increased rate for certain categories of citizens:

• disabled people of group I;
• persons who have dependents on their support;
• who worked or lived in the North.

In relation to 2020, provided that the values ​​of such quantities as PV and SPK are equal to 4982 rubles. 90 kopecks and 81.49 rub. Accordingly, the general formula for determining the amount of pension provision is as follows:

SP = IPK x 81.49 + 4982.9.

Provided that if the amount received is below the subsistence level, then it will be brought to its level established in the region of residence of the citizen by assigning a social supplement to the pension.

Registration with the Pension Fund and necessary documents

Having received an offer from the employment center for an early old-age insurance pension, a citizen should contact the territorial body of the Pension Fund of the Russian Federation. To do this, he will need to present a number of documents:

1. Referral (recommendation) issued to an unemployed person by the employment department.
2. Statement.
3. Passport of a citizen of the Russian Federation. For persons without citizenship - a residence permit.
4. Employment history.
5. Military ID.
6. Certificate of pension insurance.
7. Officially certified documents confirming the amounts and period of contributions to the Pension Fund.
8. Certificate with signatures ch. accountant and director, certified by the seal of the enterprise (organization), on the average salary received in any period consisting of five consecutive years of work - until the beginning of 2002. The average salary based on personal records for 2000-2001 can be taken into account.

In some cases, additional documents may be required:

1. About changing personal data (last name, first name, patronymic).
2. On the presence in the family of disabled people under 18 years of age (their birth certificate).
3. Certificate from educational institutions about their full-time studies.
4. About the presence of dependents (certificate from the housing and communal services or local government, if necessary - a court decision).

Payment of pensions is made at the request of the applicant through the post office or through a bank. The preferred delivery method is indicated directly in the insured person's application.

Early pensions for unemployed citizens are assigned from the day they apply for it, but not earlier than the right arises, until the day they reach the generally established retirement age or the age that gives the right to receive early pension benefits on another basis.

Work book - is it required?

Today, the Pension Fund of the Russian Federation has a special register in which all information about the work experience of each citizen of the Russian Federation who worked in an official job is entered. For this reason, “theoretically” a work book is not needed when applying for any type of pension.

However, as practice shows, without a work book it is impossible to arrange a pension for yourself, since when checking the total work experience, they first start from it, and then check it with the register.

In many cases, Pension Fund employees have questions about their work records, namely their records. But this, one might say, is nothing more than a deliberate delay in the process of registering a pension.

Based on all of the above, we can speak with confidence about the need to provide PF employees with a work book. If for any reason it is lost or damaged, it must be restored.

Refusal to grant early pension to the unemployed or termination of payment

If at least one of the above conditions necessary for assigning early payment to unemployed citizens is not met, PFR specialists will prepare a written refusal in the form of a commission decision. In this case, the employment service authorities are obliged to continue the employment of the person who applied.

In addition, reasons for refusal may be:

• maintaining the average salary, taking into account severance pay from the last place of work;
• suspension of unemployment benefits or reductions in their size;
• presence of at least three refusals from the proposed employment within a year.

Citizens should also pay attention to timely informing the Pension Fund of the Russian Federation about circumstances leading to a change in the amount of the assigned payment or its termination:

• getting a job or resuming any other activity counted towards the insurance period;
• change in the number of dependents;
• change of place of residence on the territory of the Russian Federation;
• travel outside our country.

Example

Citizen Ivanova turned 53 years old in November 2020. Since January 2020, due to a reduction in the number of employees, she was fired from the company, after which she contacted the employment center for possible employment. Due to the woman having a fairly narrow specialty in her profession and the lack of vacant jobs for such a position, she was asked to apply for an early labor (old-age insurance) pension.

• With the introduction of the new law in 2020, pension rights were converted and the amount of accumulated points for citizen Ivanova was 87.
• She earned another 4.5 points in 2020 and 2020.
• During the month of 2020, she earned another 0.5 points.
• She also has two children, with each of whom the woman spent 1.5 years on maternity leave, for which she received an additional 8.1 points.
• The number of points accumulated over the entire working life was 100.1 (87 + 4.5 + 0.5 + 8.1).

Taking into account the above formulas, the amount of the early old-age insurance pension in 2020 for citizen Ivanova will be:

100.1 points x 81 rub. 49 kopecks + 4982 rub. 90 kopecks = 13140 rub. 05 kop.

Rosalia, Osa

In March 2020, I was laid off due to the liquidation of the enterprise; I have unemployed status for 35 years; in February 2019, I turned 53 years old. The central government says that early retirement is only possible at 56 years old; I do not agree with this. Please clarify the age for early retirement in 2020.

It won't work out ahead of schedule. We need grounds in accordance with Article 30-34 of the Federal Law of December 28, 2013 N 400-FZ “On Insurance Pensions”. If they are not there, then they can rightfully refuse. And according to Appendices 5 and 6 to the Federal Law of December 28, 2013 N 400-FZ “On Insurance Pensions”, there is a shift in the retirement age.

Procedure for transferring to an old-age insurance pension

When you reach retirement age (55 or 60 years), you must again contact the Pension Fund with an application at the location of your existing pension file to assign an old-age pension or transfer to this type of payment.

The first option involves establishing the payment from the date the right to it arises, and the second option involves switching to another type of pension from the 1st day of the next month.

Important! This circumstance is taken into account by the Pension Fund specialists when a citizen applies and the most profitable option is proposed for the final decision.

To ensure uninterrupted receipt of money, the insured person should contact the Pension Fund authorities in advance, which will avoid cases of non-payment of the amount due after the termination of its transfer from the day the generally established retirement age is reached.

How to act to exercise your right?

If a citizen of the Russian Federation is fired due to the termination of the company’s activities, and he meets the conditions stated above, the following steps must be completed:

1. Ask the employer for papers confirming the liquidation of the organization, as well as other documentation for the employee.
2. Come to your local center and fill out an application to obtain the required status.
3. Get an application from an employment center employee about switching to pension coverage ahead of schedule (the document is taken in 2 copies).
4. Prepare a package of papers and decide on the method of submitting the application. The following options are available here - through the MFC, in person, after authorization in the Pension Fund’s personal account, through a representative or by mail.
5. Transfer of documentation and waiting for the application to be reviewed. This will take up to ten days.
6. Receive payments due. Money can be accrued from the moment the right to early exit appears, or from the next month after the application is submitted.