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Head of Transneft: We Often Talk Seniors Out of Retirement

Date of publication: 6 September 2018 Printable version

Nikolay Tokarev talks the prospects of the Company’s employees with an impressive service record and fair employment practices.

Amendments to the pension law were a subject of heated debates this summer. On 29 August, President of Russia Vladimir Putin, in his television address, proposed some measures mitigating the reform and providing legal protection for soon-to-retire people. Transneft President Nikolay Tokarev, in his interview for Interfax, discussed the prospects of the Company’s employees with an impressive service record and fair employment practices.

- Mr Tokarev, how does Transneft promote the interests of its seniors, what benefits and social safety net can the Company’s retirees count on?

- You referred to one the most sensitive issues of the pension reform. To begin with, I’d like to emphasise that President was absolutely right to state that we need legal protection for soon-to-retire individuals. First and foremost, the matter regards employment guarantees and real opportunities for professional growth and skill enhancement.

The principles of retaining employees and helping them develop, building a long-term relationship between employer and employee are fundamental for Transneft. These are the very specifics of our operational activity. More than anything else, we are interested in the retention of experienced staff.

At Transneft we highly appreciate the experience of our seniors. Experience comes with years of field service, and in the pipeline industry hands-on experience is more important than even extremely profound theoretical knowledge. Therefore, Transneft seniors have always been held in the highest esteem. What’s more, their record of service – and some of the workers on our payroll have worked 30, 40 or even 50 years for the Company – are another strong incentive for the younger generation, since fledgling specialists see some people work here for decades. This definitely motivates our youth, showing them a real outlook.

- The main fear about the pension reform is that people won’t live long enough after they retire. What’s your opinion?

 - I’ll give you some specific statistics: The headcount of Transneft today is around 119 thousand people, 25,000 of these or 21.6% of the total payroll being employees older than 50. As you can see, this is quite a good ratio. Furthermore, we now have 26,000 corporate retirees who get their pensions from our Transneft Non-Governmental Pension Fund.

As for “expected remaining lifetime”, Transneft’s oldest retirees are 90. Overall, we have more than 7,000 corporate male retirees and 6,500 female retirees older than the new pension age, i.e. 65 and 60 years old, respectively. Almost 3,500 of our employees are older than the current pension age of 60 for men and 55 for women. They remain active and successful workers contributing to the operational activity of Transneft. 

As I already mentioned, experience is the most valuable asset in our work and we often ask experts who reach the pension age to stay with us and share their experience and knowledge with the younger generation, working as experts, advisors, consultants.

- Suppose this prospect is real for white collars. How about blue collars? What can they expect in the light of the 5-year pension age increase?

- The statistics I’ve given you hold true for the entire team. I did not mean only white collars. By the way we have a balanced split between blue collars and white collars including engineers and technicians: about 64,000 blue collars and 55,000 office workers. These are engineers and technicians, researchers, experts and administrative staff. As a matter of fact, there are blue collars at the venerable age of 89 among our retirees.

And, most importantly, regardless of how a Transneft employee’s professional or social status may have changed over the years of their service, all of them have access to a great variety of social programmes to create worthy occupational and living conditions.

In particular, there is a large-scale programme of voluntary health insurance. Every year more than 3,000 employees and members of their families use the services of our health resort on the Black Sea coast on rather preferential terms. We partially cover travelling and recreation expenses for almost 20,000 people vacationing in other boarding houses, sanatoriums and health resorts.

Furthermore, in regions of the Company’s presence we build housing for our employees as well as schools and preschool institutions for their kids.

Right now we are having a pilot run of mobile medical units to test them. The early results obtained in the course of this experiment are encouraging as they show that we could drastically improve the situation with early diagnostics of various diseases. Just think of that: the percentage of timely diagnosed diseases will rise 6-8 times while the working time loss because of medical examinations will be cut 8 times as well.

- What awaits the Company’s employees after retirement, given the reduced income and much lower living standards?

- We create favourable conditions for our retirees. They get a corporate pension or regular payments; we also cover within reasonable limits their medical tests and treatment, tours to health resorts, damage from natural disasters and household accidents. One-off payments timed to holidays and anniversaries are also available. We also have special benefits for WWII and combat veterans as well as people who have been involved in redressing the consequences of various emergencies.

We have old age, disability and survivors’ pension plans as well as special benefits for workers engaged in hard or hazardous operations and those residing in the Arctic area or areas whose environment is deemed just as harsh. These categories may claim preterm non-governmental corporate pension. Similar benefits may also apply to those who lose their job in view of company dissolution or staff redundancies, if they are 2 years short of the retirement age. This is a direct social safety net for soon-to-retire people, but we are talking about emergencies now. 

- What incentives could Transneft propose for businesses to retain jobs for soon-to-retire people? What would you recommend to the government to facilitate execution of the task set for Transneft and other employers?

- The pension reform implementation mechanism certainly requires careful elaboration; lawyers, unions and businesses should have their say to the effect. As for Transneft, we recently submitted our proposal to the Ministry of Energy to update information about the categories of workers eligible for preferential retirement conditions. These are workers engaged in hard or hazardous operations as well those residing in the Arctic area or areas whose environment is deemed just as harsh. I believe this aspect calls for further deliberation and discussions between businesses and the government. This situation is ubiquitous in large energy companies and it is certainly necessary to take every possible measure to ensure and protect fair employment practices for such categories. These people have deserved our care. At the same time, we should avoid creating loopholes for unscrupulous employers to circumvent the law and unjustifiably enlarge the pool of those who can claim special benefits and treatment.

The pension reform decision has been made and our common challenge now is to make sure the new norms are effectively implemented and to firmly adhere to the principles of legality, fair employment practices and a responsible and careful attitude towards the worker. This is what we should work at in the years to come.

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