The Change of Trilateral Commission Prerogatives

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By virtue of the amendment to the Old Age and Disability Pension Act, passed by the Sejm on 17 June, the benefits valuation indicator is going to be fixed annually by way of negotiations on the forum of the Trilateral Commission, regardless of the inflation rate, which is currently the basis for negotiating the valuation indicator. If the amendment gains approval of the upper house of parliament (the Senate) and the President, it will enter into force

During this parliament’s term of office, which is now near its end, one of many important legislative initiatives has been the amendment to the Social Insurance Fund (Fundusz Ubezpieczeń Społecznych, FUS) Old Age and Disability Pensions Act. The amendment grants Trilateral Commission (Kmisja Trójstronna, KT) the competency of setting the old age and disability benefits valuation indicator paid from FUS. The essential change is that the valuation indicator becomes negotiable on the forum of the KT, which had not been possible under the previous legislation. The starting point for negotiations will be the valuation indicator proposed by the government.

To make things clear: according to the current legislation the real value of benefits is adjusted to the inflation rate if the latter exceeds 5% from the date of the last valuation. This means that benefits in question will be adjusted next year, as the cumulative inflation rate is bound to exceed the 5% threshold in the years 2004-2005. However, under the amended act the valuation indicator would be calculated based on the inflation rate, but - and there is another modification of the previous solutions - there would be a possibility to increase it additionally by the real pay growth rate indicator. Up till now the upper level of increasing benefits was set by the inflation rate alone, augmented by 20% of the average real pay growth at the most.

At present, before the amendment is passed by the Senate and gains the approval of the President, predicting its effects is speculative. The amendment strengthens the position of the trilateral social dialogue institution. It is also worth noticing that pensioners have their representation on the member base of trade unions, therefore the new regulations could activate the unions to take keener interest in this group of members by using the tool of the amended act.

Further more the manifestation of solidarity of all trade unions represented on the Trilateral Commission in criticising the 2005 Budget Scheme (PL0410103N), and their similar position on the governmental proposal of the minimum pay increase (PL0410101F) could mean that there is a solid tendency among unions to create a common front of opposition in social dialogue institutions against the government’s public finance proposals regarding social benefits and employee pays.

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