Ukrainians have one of the lowest pensions in Europe. This year, the Cabinet announces major pension reform after which you should be able to run a cumulative level system. According to the Pension Fund (PF), the majority of Ukrainians in retirement receive less than 1500 USD, while the minimum pension at the moment – 1247, and a maximum of 58.7 thousand. The website “Today” figured out how things work in the pension system of Ukraine.
Ukrainian pensioners are women
Pensions in Ukraine are 11.9 million people, reported in PF. Over the last few years the number of pensioners decreased significantly, this is due to the annexation of Crimea by Russia and a temporary loss of control over separate regions of Donetsk and Lugansk regions. However, together with pensioners in the occupied territories remained healthy and Ukrainians, most of whom ceased to pay a single social contribution (ERU).
How to change the number of pensioners in Ukraine
Not all pensioners over 55 years. Superannuation a “deserved rest” are teachers, some doctors, miners, military, police, etc. in Ukraine – 693 thousand people. Social pension (946 hryvnias) get to 94.7 thousand people – those who most of his life worked informally (or not worked). The most numerous category of pensioners by age, they are more than 9.1 million people.
Most of the old-age pensioners
The majority of Ukrainian pensioners – women. As explained in the Institute of demography and social studies. Ptuha, the average life expectancy of men in Ukraine is almost ten years less than women. The risk for Ukrainians die before the age of 60 years – 40%, while in Switzerland not live to 60 years, only 8% of men.
“Biological factors explain a 3 years difference, the rest of the 7-8 years due to socio-economic and psychological differences. Men, apparently, more drinking, more Smoking, less exercise, more likely to work in hazardous conditions, it’s too late I appeal to the doctors… Need to take into account the high mortality rate in road accidents,” says Institute Director, Professor Ella Libanova.
Retired almost three million more than the pensioners
On average, men live in retirement (after 60 years) 14.8 years and women 19.9 years. However, the total proportion of pensioners is increasing. In 1959 Ukrainians over the age of 60 years was 11%, in 2001 – 21%, and in 2036-m, according to the Institute of demographic studies, will be 28%. Pensioners becomes more and young people less. Pace already in the 2032-m Ukrainians aged 20 to 60 years will be less than the Ukrainians over the age of 60.
At the moment, 10 employees comprise more than 11 pensioners. This is due to the fact that the estimated PF, 25% of Ukrainians are employed informally. Of the 20 million able-bodied Ukrainians are only 16 million, and ERU, which adds to PF, pay only 10.1 million people. The rest – farmers, service workers, etc. – have the right not to pay and actively use this right. According to estimates of the Institute of demography in 2050, in Ukraine the ratio of workers to pensioners will be 10 to 15.
How many Ukrainians pay taxes in PF
How many are Ukrainians retired
At the moment, the biggest pension in Ukraine – 58,7 thousand hryvnia, given the hero of Ukraine, test pilot. The modern pensioners are retired can not be assigned, by decision of the government, there are restrictions – no more than 10, 7 thousand hryvnias on one person. However, the “cut” is already assigned to a payment prohibited by law. As senior researcher of the Institute of demography Lydia Tkachenko, judges who retire this year, the restriction “no greater than 10.7 thousand in retirement” will not feel – for them the constitutional court, this rule was canceled. How wrote on his page in the social network the people’s Deputy Viktor Pynzenyk, the judges of the constitutional Court retired in poverty don’t have. So, pension “judges” will be more than 200 thousand UAH (80% of salary).
The average size of pensions at the moment – 1828 UAH. The average pension of a judge is 22 thousand, the MP – 15 thousand, scientist – 3.7 thousand officials of 3.3 million hryvnia. Almost two million Ukrainian pensioners receive less than 1400 UAH 2.4 million – less than 1500 UAH. Among the “rich retirees” (retirement with more than 10 thousand) – 19 thousand Ukrainians, 0.2% of the total number of people “in retirement”.
Until 2012, the pension increased by 20% from the growth of the average wage in the country – for several years this rule of law does not apply. As a result, according to the Ministry of social policy, about eight million Ukrainians have calculated the basic amount of the pension is less than subsistence minimum. As explained by the expert organization “Actuarial-pension consultant” Alexander Tkach, officials decided that for the “actualization” of the payments will be sufficient to index the whole amount of the pension to the inflation rate (previously indexed only the part that is within the limits of the subsistence minimum).
However, this indexation was suspended in 2014 due to a sharp rise in prices. So, over the past three years the inflation rate had reached 80.6 percent. Therefore, the minimum pension since 2014 by the end of 2016, the year was to increase from 949 to 1713 USD. And this year up to 1851 hryvnia (according to the forecast of Ministry of economic development, inflation will be at the level of 8.1%). However, at the moment, the minimum pension – 1247 UAH, and by the end of this year it is planned to increase to 1373 UAH.
Last year retired Ukraine spent 255 billion UAH 142 billion deficit, which is compensated for by the state budget. This year the budget increased to 284 billion hryvnia, the deficit of $ 141 billion hryvnia. To increase the revenue part of the budget was due to the increase in the minimum wage two times from January 2017.
How to change the PF deficit
The PF deficit rose sharply in 2016, then the government took the decision to cut the Ust rate by almost two times. Did this on the basis that employers will be able, without changing the wage bill to increase the salaries of its employees. However, as they say in the Pension Fund, the main result of this decision is the sharp increase in the deficit. If ERU is not reduced, this year the PF would be deficit-free.
In the Cabinet plans to eliminate the deficit of the Pension Fund for six years – until 2024. “It (the situation in the pension system – ed.) those things we must change to build a new, high-quality, socially just pension system, which would, according to our calculations, to eliminate the Pension Fund deficit until 2024. This means that the pension system of Ukraine will be stable. And most importantly, this reform will inevitably lead to the increase of pensions to Ukrainian citizens,” – said the Prime Minister Volodymyr Groysman on the upcoming reform of the pension system.
