The pension revolution in 2017: what will happen to the Ukrainians

Seniors are waiting for change this year. Prime Minister Vladimir Groisman announced the start of the pension reform before the end of 2017. “Today” figured out what we have to prepare people.

THE FIRST STEP. Any details in the Cabinet was announced. Keeping the details secret until the official presentation in the Ministry of social policy. “Reform will be fair and people will feel the increase in pension payments. But the existing system will need to fundamentally change, and we are ready to offer Ukrainian society such a decision”, — said Groisman.

Some light on the future of Ukrainian pensions shed in the Parliament. The people’s Deputy from BPP and member of the Verkhovna Rada Committee on social policy Sergey Kaplin has explained to us that the first Prime Minister spoke about the development of the single social contribution, from which are formed of pension accruals from the shadows. “It will allow to solve the problem of Pension Fund deficit and will give us in the future, the Foundation for further changes,” he says. Recall that one of the key moments of changes in the pension system of the country will be a partial withdrawal from the joint system, when the pension Fund is financed by contributions of the working population, as it is now.

As noted earlier, the Vice-Prime Minister Pavlo Rozenko, to replace her should come three-tier pension system in which “solidary” will be only the first link and will take on the role of social security. “Also the introduction of the funded pillar and the development of private pension insurance. All this can become a great basis for further pension reform in Ukraine”, — he added. Solidarity system, according to Deputy Prime Minister, is bad for Ukraine because of the high shadow economy and non-payment of ERUs.

Pension RPR expert Vitaly Melnichuk also notes that pure solidarity scheme works well when the number of the working population exceeds the number of pensioners. “We have this situation changed in the eighties of the last century, so that changes it will be only the first level. The other two will be based on the basis of individual pension accounts. This is a personal account, money from which will be invested in the economy. This system works worldwide, and it has accumulated a huge amount of money — total resources now amount to over $36 trillion, and, for example, only in Poland is $130 billion,” he says. The expert confirms that this way will be able to achieve growth in pension payments. However, the increase will have to wait 5-7 years when the accounts has sufficient funds. At the legislative level, according to Rozenko, the matter will be resolved in the next 2-3 months.

PATIENT QUESTION. An important issue in the context of the pension reform is raising the retirement age in Ukraine to 63 years for both men and women. This step is one of the requirements of the IMF. Thus, despite numerous allegations that the Ukrainian authorities agreed with the Fund not to raise it, the head of the Ministry Andrey Reva in early February, admitted that the IMF continues to insist on such a solution. The Kaplin also confirmed that the Western partners persist in this matter. “They are under pressure, but these issues are handled personally by the President and does not follow this requirement”, — told the “Today” of the MP.