A. BACKGROUND

Mongolia received credit from the International Development Association (IDA) for the Strengthening Fiscal and Financial Stability Project (SFFSP). The Objective of the SFFS Project is to improve fiscal policy and sustainability in a mineral-based economy, protect the poor and vulnerable, and restore confidence in the financial sector. The project is designed into five components: (I) Strengthening Macroeconomic and Fiscal Management; (II) Improving the Efficiency of Public Financial Management; (III) Enhancing Financial Sector Stability; (IV) Strengthening the Social Protection System; (V) Project Management and Monitoring. The objectives are to Strengthening fiscal responsibility and implementing relevant policy measures, improving fiscal discipline, strengthening the resiliency of the banking system, improving public expenditure quality in social protection, providing support for Project implementation, coordination, monitoring, and evaluation, including, inter alia, audit arrangements, reporting requirements, procurement, and financial management activities respectively. For more details, please refer to the Project Appraisal Document Report No. PAD2269. The objective of sub-component D2 is to support the Government’s efforts to improve public expenditure quality in social protection through (a) strengthening social insurance by supporting the implementation of measures set forth in the State Policy on Pension Reforms (2015–2030) and other reforms to strengthen social insurance programs, and (b) strengthening the governance and FM aspects of social insurance program.

In the area of social insurance in Mongolia, the Pension Insurance Scheme poses a sharply growing fiscal burden as a result of the rapidly aging population and several measures introduced, in recent years, to the scheme, which increased benefits and/or reduced eligibility requirements. In this context, the State Policy on Pension Reform (2015–2030) was approved by the Parliament in December 2015 to “create a framework for the government, employers, and individuals to be jointly responsible for addressing the ever-increasing pension costs due to the changes in demographic structure and life expectancy and provide a decent pension benefit that is adequate for living for elders.” The state subsidy to pensions amounted to about 2.2% of GDP in 2018 (about 8% of government revenues and grants) and is projected to increase to over 6% of GDP by 2030 (about 22% of revenues and grants if held constant) and 11% of GDP by 2050[1]. The increase is primarily attributed to the rapid aging of the population (the proportion of the population over age 60 is projected to triple from 6.2% in 2015 to 18.8% in 2050) and government policies which have liberalized pension benefits and loosened qualifying conditions. 

The Ministry of Labor and Social Protection (MLSP) is working towards implementing the State Policy on Pension Reforms (2015-2030).  With this background, the MLSP hired local consultants between 2017 to 2021 to get technical support in the process of developing the concept notes of legal revisions and preparing the drafts of four revised social insurance package laws (The General Law on Social Insurance, Law on Pensions and Allowances Provided from Social Insurance Fund,  Law on Unemployment Benefit Provided from Social Insurance Fund, Law on Pensions and Benefits Provided from Industrial Accidents and Occupational Disease Insurance Fund). 

The concept notes for revising the laws were first approved by the Ministry of Justice and Home Affairs on August 10, 2018, and were revised again and approved jointly by the Minister of Justice and Home Affairs and the Minister of Labor and Social Protection on December 3, 2020. On October 15, 2021, the Cabinet submitted to the Parliament the draft revised Social Insurance Package Laws. Since then, the minimum pension amount was increased to 500.0 thousand MNT by Government Resolution No. 63 of February 1. Therefore, the Parliament recommended the Government withdraw and revise the draft General Law on Social Insurance and the draft Law on Pensions Provided from the Social Insurance Fund. At the Cabinet meeting on April 13, It was decided to withdraw the two laws (The draft revised General Law on Social Insurance, and the draft revised Law on Pensions Provided from Social Insurance Fund) that were withdrawn at the 2022 spring session.) submitted to the Parliament. The Cabinet also instructed the MLSP to revise and re-submit the above two laws. The working group of MLSP is working on the updating revision of the draft Social Insurance Package Laws, aiming to submit Parliament by end of spring session 2022.  If the Parliament agrees to the further discussion of the draft law during its plenary session, the Social Policy Standing Committee of the Parliament shall establish a Working Group (WG-Parliament) mandated with the responsibility of discussing the draft Social Insurance Package Laws.

In this regard, the MLSP needs further support in i) supporting the MLSP during Parliamentarian discussions on the drafts of revised laws, and providing additional information that could be required from Parliament members ii) supporting the MLSP to conduct stakeholder consultations on the revised draft laws during the Parliament discussion, iii)  effectively communicating about the social insurance reforms to the public; iv)  developing or revising respective regulations and procedures to be followed under the proposed revised laws.

Therefore, the MLSP requests to hire two national consultants to assist the Ministry and its Working Groups in implementing the above-mentioned activities. This TOR outlines the scope of work and deliverables for a National Consultant 1 (NC1). The NC1 will primarily focus on a series of assignments related to the revision of the following two laws: i) Law on Pensions Provided from the Social Insurance Fund, ii) the draft Law on Benefits Provided from the Social Insurance Fund and iii) Law on Pensions, Benefits, and Payments for Industrial Accidents and Occupational Diseases.   

The NC1 shall work closely with the National Consultant 2 (the scope of work is to be provided by a separate TOR) and ensure that the further enhancements to be made to the draft revised laws reflect the policy priorities, including the State Policy on Pension Reform (2015-2030),  latest analytical studies (including, analytical studies done  on key reform needs and options in respect of the reserve and liquidity management of the Social Insurance Fund (SIF), and on key reform needs and options to strengthen social insurance contributions collections)  and stakeholder consultations planned during Parliament discussion process of the draft revised laws. 

The NC2 will work closely with relevant officer/officers of the Policy Planning Department of the MLSP, as indicated by the MLSP, and engage them in revising or developing the draft laws and accompanying regulations, so that the knowledge and experience of the consultant is transferred to the respective officers of the MLSP through close and hands-on engagement in the process of respective tasks. 

B. OBJECTIVE OF THE ASSIGNMENT

The main objective of this consultancy service is to facilitate the MLSP and the WG-Parliament in the discussion of the draft revision of respective social insurance laws, and support the Ministry in carrying out public awareness and training activities for journalists, stakeholders and social insurance inspectors which will focus on dissemination of information on social insurance reforms and revision of social insurance laws. 

C. SCOPE OF THE WORK

The local consultant will be responsible for the following tasks for this assignment. These include: i) further support the parliamentarian discussion process on the draft revised Law on Pensions Provided from the Social Insurance Fund, ii) further support the parliamentarian discussion process on the draft revised Law on Benefits Provided from the Social Insurance Fund, iii) further support the parliamentarian discussion process on the draft revised Law on Pensions, Benefits, and Payments for Industrial Accidents and Occupational Diseases from the Social Insurance Fund, iv) provide the WG-Parliament with additional information and calculations related to the draft law mentioned in (i), (ii) and (iii); v) support the MLSP in carrying out a series of stakeholder consultations on the revision of respective laws; vi) draft regulations and procedures expected to be adopted following the approval of the above three laws, vii) provide relevant information of international experience of the pension formula and other required information, viii) update several contents on the revised laws which will be designed for public awareness activities.

The consultant will undertake the following tasks: 

Task I. Further elaborate the draft Law on Pensions from the Social Insurance Fund, taking into consideration the comments of the WG-Parliament and recommendations provided by development partners, including the World Bank;

Task II. Further elaborate the draft Law on Benefits from the Social Insurance Fund, taking into consideration the comments of the WG-Parliament and recommendations provided by development partners, including the World Bank;

Task III. Further elaborate the draft Law on Pensions, Benefits and Payments for Industrial Accidents and Occupational Diseases from the Social Insurance Fund, taking into consideration the comments of the WG-Parliament and recommendations provided by development partners, including the World Bank;

Task IV. Prepare information on international experiences for Parliament members on pension measures, achievements, lessons learned, and programs within the framework of the Social Protection and Pension Reform, as well as methods and formulas for calculation of pensions, and support the development of social protection agreements with related countries; 

Task V. Conducting cost projections on pensions and benefits in view of design changes to the parameters, policy options  during the process of discussing the revised drafts of  Social Insurance Package Laws by the  Parliament;

Task VI.  Update background materials for public communication products on  the draft revision of respective three social insurance laws, in view of further elaboration of the draft laws by the WG-Parliament and performing  accuracy review of the drafts of various products; 

Task VII. Prepare support materials for presenting the draft revision of respective three social insurance laws during the Parliamentarian discussion, and support the MLSP in synthesizing the comments and recommendations provided by stakeholder and public consultations (online and offline) on these respective draft laws and proposed amendments to other related laws and reflecting them as appropriate, into draft legislation;

Task VIII. Update and develop  the drafts of four resolutions, rules, procedures and methodologies and develop the drafts of regulations and rules to be approved by the Government and National Social Insurance Board (NSIB) in connection with the implementation of the revised Law on Pensions Provided from the Social Insurance Fund (See the list of to be updated and newly developed regulations and rules in deliverable 8 of this TOR);

Task IX. Update and develop amendments to the four drafts of resolutions, rules, procedures and methodologies as indicated by  the MLSP to be approved by the Government and National Social Insurance Board (NSIB) and to be approved by the Government in connection with the implementation of the revised Law on Pensions, Benefits and Payments for Industrial Accidents and Occupational Diseases from the Social Insurance Fund (See the list of to be updated and newly developed regulations and rules in deliverable 9 of this TOR);

Task X. Update and develop amendments to the four drafts of resolutions, rules, and procedures as indicated by the MLSP to be approved by the Government and National Social Insurance Board (NSIB) and the Government in connection with the implementation of the revised draft Law on Benefits Provided from The Social Insurance Fund. (See the list of to be updated and newly developed regulations and rules in deliverable 10 of this TOR);

Other tasks as reasonably requested by the MLSP and technical working group. 

D. DELIVERABLES

In order to ensure the quality of the deliverables, all deliverables should be discussed with relevant officials of MLSP and SIGO and incorporate the comments. In addition, all deliverables provided by the consultant should be newly developed or modified, not identical to the products supplied by the consultant who has previously worked in this field:

Deliverable 1. Referring to the Task I:

1.1. Further elaborated  drafts of the revised Law on Benefits Provided from the Social Insurance Fund to be readied for approval of the Parliament;

1.2. Further elaborated draft amendments to other relevant laws to be approved together with the draft revised Law on Benefits Provided from the Social Insurance Fund;

1.3. Record of how the comments and suggestions of Members of Parliament (MPs) and stakeholders were reflected in the finalized draft of the Law on Benefits Provided from the Social Insurance Fund.

Deliverable 2. Referring to the Task II:

2.1. Further elaborated drafts of the revised Law on Pensions, Benefits and Payments for Industrial Accidents and Occupational Diseases from the Social Insurance Fund to be ready for approval of the Parliament;

2.2. Further elaborated draft amendments to other relevant laws to be approved together with the draft revised Law on Pensions, Benefits and Payments for Industrial Accidents and Occupational Diseases from the Social Insurance Fund;

2.3. Record of how the comments and suggestions of Members of Parliament (MPs) and stakeholders were reflected in the finalized draft of the Law on Pensions, Benefits and Payments for Industrial Accidents and Occupational Diseases.

Deliverable 3. Referring to the Task III:

3.1. Further elaborated drafts of the revised Law on Pension Provided from the Social Insurance Fund to be ready for approval of the Parliament;

3.2. Further elaborated  draft amendments to other relevant laws to be apporved together with the draft revised Law on Pension Provided from the Social Insurance Fund;

3.3.  Record of how the comments and suggestions of Members of Parliament (MPs) and stakeholders were reflected in the finalized draft of the Law on Pension Provided from the Social Insurance Fund.

Deliverable 4. Referring to the Task IV:

4.1. Notes presenting the cases  of other  countries of interest (countries with formerly socialist regime and countries that might be reasonably requested by the MLSP) on pension reform measures, achievements, lesson learned, as well as methods and formulas for calculation of pensions;

4.2. The report on tasks carried out for  supporting social protection agreements process of the MLSP with related countries. 

Deliverable 5. Referring to the Task V:

5.1. cost projections on pensions and benefits in view of design changes to the parameters, and policy options, which are requested from Parliament WG and Parliament members during the Parliamentarian discussion process.

Deliverable 6. Referring to the Task VI:

6.1. Updated background materials (at least 6 types) to be used for developing public communication products that fully capture the context, objective, nature, scope, and specifics of social insurance reform issues  and are related to the draft revision of respective social insurance laws;

Deliverable 7. Referring to the Task VII:

7.1. Developed comparison of the provisions of the old and the revised laws, add explanatory columns, by format as indicated by the MLSP of the respective three laws;

7.2. Introduction and explanation of how MPs and other organizations' suggestions were reflected;

7.3. A set of technical questions and answers that might be asked during the parliament discussion;

7.4. The matrix of main comments and recommendations drawn from consultations done during the Parliamentarian discussion of the respective three draft laws with key stakeholders carried out before approving the revised laws by the Parliament and the notes on how they were addressed in the draft legislation.  

Deliverable 8. Referring to the Task VIII:

The revised/newly developed full drafts of the following four developed draft regulations and procedures are to be approved by the Government or respective Ministers in connection with the implementation of the draft revised Law on Pensions Provided from the Social Insurance Fund:

8.1. The revised draft of the list of jobs and occupations related to underground, hazardous, and hot working conditions, and procedures for their use;

8.2. The  newly developed draft of the methodology for establishing a standard salary for national jobs and occupations for retirement;

8.3. The  revised draft of procedures for determining and applying the average wage and equivalent income for a consecutive period of retirement;

8.4. The newly developed draft methodology for determining the minimum pension from the pension insurance fund and the average retirement period.

Deliverable 9. Referring to the Task IX:

The revised/newly developed full drafts of the following four developed draft regulations and procedures are to be approved by the Government or respective Ministers in connection with the implementation of the draft revised Law on Pensions, Benefits and Payments for Industrial Accidents and Occupational Diseases from the Social Insurance Fund:

9.1. The revised draft procedure regulating the relations related to the payment of pensions and benefits and the list of documents to be submitted by the insured when applying for an industrial accident pension and benefits;

9.2. The revised draft list of documents to be submitted by the insured to apply for industrial accident expenses and other procedures related to payment and financing;

9.3. The newly developed draft procedures of the selection of the organization to hold preventive measures, the financing of expenditures, and monitoring;

9.4. The newly developed draft procedures for granting discounts, exemptions, and supervision to employers.

Deliverable 10. Referring to the Task X:

The revised/newly developed full drafts of the following four developed draft regulations and procedures are to be approved by the Government or respective Ministers in connection with the implementation of the revised draft Law on Benefits Provided from The Social Insurance Fund:

10.1. The revised draft procedure regulating the relations related to the payment of the benefit and the list of documents to be submitted by the insured to receive the benefit;

10.2. The revised draft procedure for issuing a medical certificate to the insured and the draft form of the medical certificate;

10.3. The revised draft procedures related to the provision of premiums to employers;

10.4. The revised draft methodology and instructions for calculating the benefits and supervising the documents required to receive the insured's benefits.

E. CONSULTANT’S QUALIFICATIONS/ SELECTION CRITERIA 

• Education: A suitable candidate should have a bachelor's degree in economics, labor, social management or Social Science or related field;
• Professional qualifications: A suitable candidate should have extensive experience with social insurance policies and strategies, and experience in preparing and developing social protection policies and legislation would be a plus; 
• Experience: A candidate should have at least 8 years of directly relevant professional experience in the field of social insurance policies; 
• Language literacy: A candidate should have excellent Mongolian writing and understanding of English;
• Other: Excellent communication and interpersonal skills with the ability to function effectively and collaboratively in a team environment, high proficiency in processing the documents, being punctual and ability to bear the workload.

F. SUPERVISION AND REPORTING

The consultant will report directly to the Head of a Technical Working Group, who is the Director of Policy, Planning Department (PPD).  The consultant will work on a day-to-day basis under the guidance of the Lead consultant and Director of PPD on technical matters related to the assignment. Work progress will be presented during the working group meeting or other meetings as needed.   

The Director of PPD shall evaluate the performance on the agreed deliverables and approve the invoices for the delivered outputs.   

The consultant will prepare a 3-5 pages summary progress report detailing the achievements and impediments in executing the entire assignment effectively.  The MLSP and SFFS PIU will provide input to the evaluation of the consultant’s performance. 

G. CONTRACT DURATION

The consulting service is expected to commence in June 2022.  The contract will have a duration of 10 months through March 2023.

 The contract will not be subject to extension. If any task is not finished and approved by the MLSP within the agreed-upon timeline, the consultant’s payment will be   reduced proportionally.

H. PAYMENT CONDITION

Payments will be released upon satisfactory completion of all deliverables due for each task, according to the following schedule:

• Submission of Deliverable 1 stated in the ToR conditional on the  MLSP’s approval: 7 % of the total contract amount;
• Submission of Deliverable 2 stated in the ToR conditional on the  MLSP’s approval: 8 % of the total contract amount; 
• Submission of Deliverable 3 stated in the ToR conditional on the  MLSP’s approval: 8 % of the total contract amount;
• Submission of Deliverable 4 stated in the ToR conditional on the MLSP’s approval: 8 % of the total contract amount; 
• Submission of Deliverable 5 stated in the ToR conditional on the  MLSP’s approval: 8 % of the total contract amount;
• Submission of Deliverable 6 stated in the ToR conditional on the  MLSP’s approval: 8 % of the total contract amount; 
• Submission of Deliverable 7 stated in the ToR conditional on the  MLSP’s approval: 8 % of the total contract amount;
• Submission of Deliverable 8 stated in the ToR conditional on the  MLSP’s approval: 15 % of the total contract amount;
• Submission of Deliverable 9 stated in the ToR conditional on the  MLSP’s approval: 15 % of the total contract amount;
• Submission of Deliverable 10 stated in the ToR conditional on the MLSP’s approval: 15 % of the total contract amount.

The payment to the consultant may not follow the sequencing of the above subject to the actual delivery of the deliverables to the satisfaction of the MLSP.  

G. INSTITUTIONAL ARRANGEMENTS

The MLSP will provide office space for the consultant to work with the national consultant and other related international consultants and technical working group as well as the MLSP officials.  The consultant will have access to all necessary data and information.  

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