MONGOLIA

FELLOWSHIP TRAINING ON EMPLOYMENT INSURANCE (EI)

AND EMPLOYMENT INJURY INSURANCE (EII)

COUNTRY REPORT (Mongolian Social Insurance General Office)

SEOUL, REPUBLIC OF KOREAOCT.05-14.2011

CONTENTS

Brief statistics

Social insurance legislation

Organizational structure

Types of social insurance

Contribution rates, coverage and benefits

Coordination system among related institution

Policy responses toward the resent global economic crisis since 2008

Challenges ahead regarding the development of EI or EII

BRIEF STATISTICS

Population: 2.8 million, scarcely populated Economically active population – 1.147 million Total number of employees – 1.033 million

34.7% of which work in the agricultural sector (mainly herders)

Official unemployment rate – 9.9% Inflation rate – 10.1% Life expectancy at birth: Men-64.33

Women-71.19** Average salary: appr. USD300

National GDP 8 255 bln.tug

SOCIAL INSURANCE LEGISLATION

Social Insurance Package Law was approved by the Parliament of Mongolia on May 31, 1994 and came into effect on January 1, 1995

19

95

.01

.01

LEGISLATION LIST

Law on Social Insurance Law on Pensions & Benefits Provided by the

Fund of Social Insurance

Health Insurance Law

Law on Benefits Provided by the Fund of Social Insurance Against Employment Injury & Occupational Disease

Law on Unemployment Benefit Provided by the Fund of Social Insurance

Law on Individual Pension Insurance Contribution Accounts

Law on Social Insurance Fund Budget

Law on Pensions and Benefits for Servicemen

ORGANIZATIONAL STRUCTURE

Social Insurance General Office

Ulaanbaatar city Social Insurance Office

Aimag (Province) Social Insurance Divisions

Medical Labour

Accreditation Commission

Medical Labour

Accreditation Commission

District SIDDispute

Resolution Council

Soum SI inspector

Dispute Resolution

Council

Social Insurance National Council

Health Insurance Sub Council

Minister of Social Welfare and Labor

Dispute Resolution Council

Social Insurance Representative Office in the Republic of Korea

Information and Public Awareness Division

Department of Health Insurance Inspection and Financing

Inspection and Evaluation Department

Financial Bookkeeping and Reserve Fund Department

Foreign Relations Division

Public Administration Department

Policy Implementation and Planning Department

Information Technology and Training Centre

DIRECTOR GENERAL

Social Insurance

General Office Organizational

Chart

Medical Labour Accreditation Central Commission

TYPES OF SOCIAL INSURANCE

Pensions insurance

Benefits insurance

Health insurance

Insurance against employment injury and occupational diseases

Unemployment insurance

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IAL

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CONTRIBUTION RATES

Types of Insurance

Contribution Rates for Compulsory Insurance (percentage)

Contribution Rates for Voluntary Insurance

(percentage) Employer Employee

Pension 7.0 7.0 10.0Benefit 0.5 0.5 1.0 Employment Injury and Occupational Diseases

1.0, 2.0, 3.0 1.0

Unemployment 0.5 0.5 Health 2.0 2.0 Total 11.0,12.0,13.0 10.0 12.0

STATISTICS (CONT.)

1995 2000 2005 2006 2007 2008 2009 201065.0%

70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

89.1%

85.1%

77.6%74.5%

81.7%

85.6%

79.5%

86.3%

Social Insurance Coverage compared to total popula-tion (percent)

1995 2000 2005 2006 2007 2008 20090

50000100000150000200000250000300000350000400000450000500000

Social Insurance Fund Revenue and Expenditure (mln. tugriks)

Social Insurance Fund Revenue Social Insurance Fund Expenditure

STATISTICS (CONT.)

1995 2000 2005 2006 2007 2008 2009 20100

50

100

150

200

250

300

350

Number of beneficiaries from the Pension In-surance Fund (thous.persons)

Number of beneficiaries from the Pension FundNumber of Old-age pensioners

STATISTICS (CONT.)

Pensionable age

60 for men

55 for women

UNEMPLOYMENT INSURANCE

Purpose

Benefit during loss of employment, bankruptcy of the business, and vocational training and retraining opportunities

Current unemployment insurance is at least 3 points lower than the international standard:

1. Tight eligibility requirements

2. Low amount of benefit

3. Benefit duration is 76 days

COORDINATION SYSTEM AMONG

RELATED INSTITUTION

Social insurance general office

- Collect UI contribution

- Finance benefit and other service cost to LWSO

Labour, Welfare service office

- UI benefit service

- Job matching service

- Vocational training

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INSURANCE AGAINST EMPLOYMENT INJURY AND OCCUPATIONAL DISEASES

Insurance against employment injury and occupational diseases (IAEIOD)

Employer is responsible for contribution payment

Services provided by the IAEIOD fund include providing pensions and benefits, taking prevention measures, making prosthesis, rehabilitation care, resort for people with occupational diseases and acute toxicity

EMPLOYMENT INJURY

Injuries acquired during the following circumstances are considered as employment injury:

1/ while discharging employment duties at work place or other places;

2/ before the commencement of the general working hours or after the general finishing time in the course of arranging the work place and equipment;

3/ travel to or from an insured person's place of work

BENEFITS PROVIDED BY THE FUND FOR INSURANCE

AGAINST EMPLOYMENT INJURY AND OCCUPATIONAL

DISEASES (IAEIOD) The following benefits are provided by the fund for

IAEIOD:

Disability pension

Survivor’s pension

Benefit for temporary loss of working capacity

Rehabilitation cost

Pension insurance contributions for people who became disabled as a result of employment injury or occupational diseases

Variable cost which incurred for the health care of the insured at the resort.

BENEFITS PROVIDED BY THE FUND FOR INSURANCE AGAINST EMPLOYMENT INJURY AND

OCCUPATIONAL DISEASES (IAEIOD) Contribution rate for the IAEIOD is set

differently for employers depending on the type of activity.

The amount of contribution rates are set by the Government decree.

State Social Insurance General Office (SSIGO) considers the propositions by the local Social insurance divisions and then elaborates the revenue and expenditure budget for the fund which then is reviewed by the Social Insurance Nation Council and approved according to the Law on state budget.

NUMBER OF OCCUPATIONAL DISEASES AND

EMPLOYMENT INJURIES \BY INDUSTRY\

No. Industry Number of

people

Percent

1 Education, health 124 1.9

2 Culture and science 40 0.6

3 Heavy industry, geology, mining 4558 71.3

4 Light and food industry 372 5.8

5 Construction, road

transportation, communication

837 13.1

6 Agriculture 105 1.6

7 Trade, service 30 0.6

8 Other 325 5.1

Total 6391 100

POLICY RESPONSES TOWARD THE RESENT

GLOBAL ECONOMIC CRISIS SINCE 2008

Mongolian government conducted the following short term measures (till 1 January 2011) in order not to reduce the income of unemployed people.

The term of the right to get unemployment benefits was changed from the last 9 months till 6 months when contribution was paid non stop.

The beneficiary who got unemployment benefits before had the new right of unemployment benefits when he paid during 6 months. This term was deducted till 3 months.

Unemployment insurance was accounted by 126 days not by 76 days.

But the above mentioned concession was carried out during the short term and cancelled on 1 January 2011.

CHALLENGES AHEAD REGARDING THE DEVELOPMENT OF EI OR EII

The goal of Mongolian government is to undergo pension reform and it is preparing for moving to 3 pillars pension scheme.

Within the frame of this reform the packet laws of social insurance are being reformed and the following changes will be made herein.

1. For unemployment insurance :

-Unemployment benefits will be granted by the Social insurance organizations not by the General Office of Labour and Benefits Service.

- not to increase unemployment insurance contribution.

- to raise the calculating rate of unemployment benefits.

CHALLENGES AHEAD REGARDING THE DEVELOPMENT OF EI OR EII (CONT)

2. Within the frame of Employment injury insurance:

- to establish disability pension newly.

- to increase contribution paid from employers.

- to increase the calculating rates of pension and benefits.

- to reduce the number of documentation.

THANK YOU FOR YOUR ATTENTION