EDB, WB in favor of pension mobility in Eurasian Economic Union

The report was initiated by the Center for Integration Studies of the Eurasian Development Bank (EDB Center) and the World Bank (MIRPAL regional migration program). It introduces the concept of labor pension mobility between labor recipient countries (Russia, Kazakhstan, and Belarus) and labor donor countries (Kyrgyzstan, Tajikistan, and Armenia).

Pension mobility is a process of interstate reciprocal recognition of labor migrants' pension rights. According to the report, introduction of pension mobility in the context of labor migration processes within the emerging Eurasian Economic Union can be built on the EU countries' best practice experience. International best practice proves that if donor and recipient countries use different social security systems, the issue of pensionary payments could be resolved through coordination of pension assignment rules. This coordination provides that pensionary assignments and payments are to be made by the pension fund of the country where the labor worker resides and applies for pensionary support. The pension fund of that country will then receive transfers (compensation) from the pension fund of the other country, where a labor migrant has worked. Compensation payments/transfers can be pro-rated based on the number of years that have been worked abroad.

Today, overall coordination between countries and their pension funds has not yet been developed in the CIS countries, or within the framework of the Single Economic Space. However, there is a need to improve the living standards and provide a decent life for labor migrants as they get older. From the macroeconomics point of view, an efficient pension mobility system could help improve the mobility, flexibility, and efficiency of the labor force as a production factor, as well as help raise the global competitiveness of the Eurasian Economic Union.

Introduction of labor migrants' pension mobility is an important item on the agendas of the Single Economic Space and the Eurasian Economic Union. "Pension mobility should become part and parcel of the free movement of workers, as should concerted social policies within the emerging labor market of the Single Economic Space. In the long-term, the formation of a common pension space in the countries of the Single Economic Space and the Eurasian Economic Union can mark a step forward to reducing the scope of illegal labor migration and to developing labor relations of a higher quality," said Evgeny Vinokurov, Director of the EDB Center for Integration Studies

"Providing the free movement of labor is one of the fundamental functioning principles of any economic union. However, lifting registration barriers and simplifying regulatory approvals for labor force migration between countries of the Single Economic Space and the Eurasian Economic Union could not be effective unless social guarantees are to be provided," Stepan Titov, World Bank senior economist and MIRPAL program head, was quoted as saying.

The Eurasian Development Bank (EDB) is an international financial institution set up by Russia and Kazakhstan in January 2006 to facilitate the development of the market economies of the participating countries, their stable economic growth, and the expansion of their mutual trade and economic relations. The EDB charter capital is over USD 1.5 billion. The EDB participating countries are Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia and Tajikistan, BelTA reports.

MIRPAL (Migration and Remittance Peer-Assisted Learning Network) is a community of migration and remittance practitioners and experts representing governmental and non-governmental organizations from nine CIS countries: Armenia, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Uzbekistan, and Ukraine.