| Project Detail |
Project Development Objective PDO Statement 16. The Project Development Objective (PDO) is to improve the quality of services in administering social insurance and strengthen the regulatory framework for people with disabilities and hazardous occupations. PDO Level Indicators 17. The PDOs will be measured by the following indicators • Indicators for PDO Part 1: Improve the quality of services in administering social insurance: o Single unified registry of socially insured individuals developed and functional o Proportion of insured population whose social insurance information is centrally available to all social insurance agencies • Indicators for PDO Part 2: Strengthen the regulatory framework for people with disabilities and hazardous occupations: o Proportion of disability certificate applicants during the past month who had at least one previously issued and currently valid disability certificate o Average time to issue a disability certificate Project Components 18. The project activities will address specific and relatively narrow technical areas within the administration of social insurance. The project will support the Government’s efforts to continue with the process of improving the quality of the services delivered by the social insurance administration. The proposed operation will make investments in (a) developing the SURS central registry of socially insured individuals, (b) improving the PIOM’s capacity and business processes, (c) establishing the CDCCU, (d) revising the list of hazardous occupations eligible for early retirement with an ESP, and (e) supporting the implementation of the legal and institutional framework for employment and professional rehabilitation of persons with disabilities. 19. The project will be organized in two main components and five subcomponents, with an additional third component related to project management. • Component 1. Improving the quality of the social insurance administration services o Subcomponent 1.1 Establishment of Single Unified Registry System for social insurance o Subcomponent 1.2 Improvement and modernization of business processes in PIOM • Component 2. Strengthen the regulatory framework for people with disabilities and for hazardous occupations o Subcomponent 2.1 Establishing unified disability assessment system and Central Disability Certification Coordination Unit (CDCCU) o Subcomponent 2.2 Reforming the system of employment of persons with disabilities o Subcomponent 2.3 Revision of the list of hazardous occupations eligible for early retirement with extended service period (ESP) • Component 3. Project Management Component 1. Improving the quality of the social insurance administration services (approximate credit amount: EUR 8.92 million/US$ 9.81 million equivalent) 20. This component supports the establishment of the central registry of socially insured individuals (SURS) and modernization of pension administration. Based on the Government’s decisions (No. 45-5503/1, August 20, 2019, and No. 45-8738/1 of November 26, 2019) the existing systems of insured persons’ registration and contributor databases managed in the social insurance agencies would cease operation and be replaced by SURS to be established by an entity under the MLSP. Subcomponent 1.1 Establishment of Single Unified Registry System for social insurance. 21. In the SURS, registration to all or any branch of social insurance will be a one-stop-shop process and will involve a unified, simplified, standardized, and centralized function. All persons registered in the SURS will be visible to all social insurance agencies and to UJP—thereby reducing the opportunity for contribution or tax evasion by selectively registering with one agency and not others. The SURS database will be used by all social insurance agencies and by the tax administration (PIOM, FZO, AVRM, UJP), and by the Agency for Supervision of Pension Funds in North Macedonia (MAPAS) (on behalf of Pillar 2 pension funds). The SURS will also be used by the MLSP’s social assistance cash benefits database system. The SURS will be hosted, managed, and maintained by an entity to be established under the MLSP. This project component will assist the MLSP/SURS to integrate and centralize the existing social insurance registries), develop the organizational structure and business processes for the SURS, and establish client connections with all system users. Centralized registration and recordkeeping by the SURS will provide a single, unified, standardized, accurate, and timely stream of information on employers, insured individuals, and all social contributions. Centralization of these services will release capacities in the AVRM, PIOM, and FZO currently engaged in registration and recordkeeping administration; establish an accurate database and information flow to UJP in the process of contribution collection and control; and significantly reduce the scope for contribution and payroll tax evasion. Moreover, the SURS will provide timely information to Pillar 2 Funds on membership and payment of Pillar 2 contributions and will allow the precise and direct transfers of the Pillar 2 contributions from the employers to the insured persons, thus preventing delays of the assets’ capitalization by the Pillar 2 Funds. This would provide a permanent solution to the problems of missing, underpaid, and overpaid contributions to Pillar 2. The key advantage of the SURS is that it helps abolish and practically prevents multiple entry points for registration/deregistration of insured persons. In addition, the participating agencies and Governmental institutions (Government, MLSP, Ministry of Finance [MoF], Ministry of Health [MoH], State Statistical Office, and so on) would benefit from accurate, periodical, and aggregate reporting. In that regard, the insured persons’ interests, rights, and responsibilities will be exercised in a legal and proper manner. Subcomponent 1.2 Improvement and modernization of business processes in PIOM. 22. This subcomponent will support the strengthening of business processes and the administrative capacity of the PIOM to serve the insured individuals in Pillar 1 more efficiently and effectively. Activities supported by this project will have a direct impact on the PIOM’s operations. Centralizing the social insurance registry in the SURS and disability assessment in the CDCCU will relieve the PIOM from performing these tasks and enable the PIOM to use resources to strengthen its other functions. Developing the SURS’ data centralizing and warehousing functions and integration of the existing social insurance registries will require the consolidation of past earnings records, used mainly by the PIOM. Individual earnings histories in the PIOM experience shortfalls, including incomplete records of service periods, contribution bases or contributions paid, with paper-based archives, which are detected only at the point of benefit request and determination. It is estimated that there are up to 20 percent of missing data in the earnings records history, related to different periods and data categories. For future smooth processing of pension requests and providing the information to all insured individuals through the SURS, these records should be reconciled, digitized, and made available to the social insurance agencies and insured individials. This subcomponent will engage in the initial analysis of the earnings history problem in the PIOM and the campaign of completing all past records within the SURS development process. It is envisaged that this subcomponent will, in parallel, engage in a functional analysis of the PIOM and its processes to detect the areas, paths, and dynamics for institutional upgrade. Areas of engagement will depend on the results of the functional analysis and are expected to include business process modernization, information and communication technology (ICT) capacity building, and human resource strengthening through training. 23. The list of activities includes the following: • SURS business function needs analysis in each participating agency; • Design of the SURS and business operations model; • Development of the SURS for social insurance—investment in organization structure, equipment, software, business processes, and training staff; • Development of new legislation and harmonization of the existing legislation Migration of client and insurance data from multiple registries to the new SURS and cleanup of such data; • Adjustment of FZO, AVRM, PIOM, UJP, MAPAS, and MLSP to SURS—investment in data links and interfaces with the SURS, adjustment of business processes, ICT, and training for selected staff; • Consolidation of the PIOM’s database of historical earnings of insured individuals; • A functional review of the PIOM and investment in PIOM modernization, including business processes, technical capacity, ICT, human resource training, and client services; and • A public information and education campaign on the SURS functionalities, benefits for users, and operations. Component 2. Strengthening the regulatory framework for persons with disabilities and for hazardous occupations (approximate credit amount: EUR 4.20 million /US$4.62 million equivalent) 24. Following the Government’s pension reform implementation program and decision to continue with the disability system reform, this component envisages three subcomponents supporting the implementation of the reformed system. Subcomponent 2.1. Establishing unified disability assessment system and Central Disability Certification Coordination Unit (CDCCU). 25. The Government’s decision to simplify, unify, and streamline the parallel processes envisages establishment of the CDCCU in the MLSP responsible for initiating, organizing, performing, and reporting on all disability assessments in the country. The CDCCU will organize the certification teams from a network of medical and other experts licensed for disability certification on a case-by-case basis. This subcomponent of the project will support the establishment of the CDCCU, including investment in its business processes, technical equipment and human capacity, and the system of monitoring and evaluation (M&E), licensing, supervision, and control. Investment would also include providing public information and education on the reform and using new userfriendly disability certification processes. Subcomponent 2.2. Reforming the system of employment of persons with disabilities. 26. The policy objective of the Government to widen employment opportunities for persons with disabilities and raise their inclusiveness in the labor markets will require a broad public debate of policy options for employment of persons with disabilities, legal preparatory work, and a public information and education campaign. Policy options analysis, especially those considering the redistribution of current ‘sheltering’ subsidies toward professional rehabilitation and activation programs for inclusion of persons with disabilities in the open labor market, will have to be prepared before the public debate. The public debate should result in a modern and sustainable Law on Employment of Persons with Disabilities in 2021. The need for setting up a National Registry of Persons with Disabilities has been emphasized for decades. Its development and maintenance by the MLSP will enable designing the appropriate policy measures and their monitoring and evaluation. Activities expected to be supported within this subcomponent thus include providing technical assistance to discuss and develop the new legislative framework; organizing national information and education campaigns, especially targeted toward persons with disabilities; and establishing the National Registry of Persons with Disabilities and a system of monitoring and evaluating in the MLSP. The analytical tasks that inform the new framework would also be designed to collect additional information on the gender gaps that might exist in the institutional setup and the labor market for employment of persons with disabilities. Subcomponent 2.3. Revision of the list of hazardous occupations eligible for early retirement with extended service period (ESP). 27. The objective of the reform considered by the Government is to revise the ESP list, reassess the risk hazards for each of the workplaces, limit the early retirement option only to the work conditions with high health hazards and potentially irreversible acute health consequences, and establish an early retirement system that would incentivize longer activity in the labor market. The main activity supported by this subcomponent would be to engage a team of ergonomic, medical, and other experts to revise all workplaces and work conditions in North Macedonia with currently declared health hazards. The subcomponent will also support analysis of the reform options and development of the reform proposal, including the legal changes. The analysis will also look at possible gender disparities between men and women in hazardous jobs, and in their eligibility for early retirement. Component 3: Project management (EUR 0.65 million/US$0.71 million equivalent) 28. This component will support the day-to-day management of project implementation and the M&E of its objectives and outcomes. This component will finance the activities that would ensure effective administration and implementation of the project by supporting (a) the strengthening and operation of the Project Management Unit (PMU), including the provision of operating costs; and (b) development and implementation of an M&E system for the project. |
