Starting in 2024, Ukraine is planning to introduce a pension reform, which provides for the introduction of two main pension systems: mandatory accumulative and lump sum. This information was voiced by Lydia Tkachenko, a senior researcher at the Institute of Demography and Social Research, on the air of Public Radio.
According to Tkachenko, the issue of pension reform will be relevant for Ukrainians for a long time. There are about 10 million pensioners in Ukraine today, and the average pension is only 5 thousand hryvnias. Despite this, pension costs remain among the largest among other social expenditures. "The budget of the Pension Fund is a lot of money," the expert noted.
Accumulation system: on individual accounts
One of the main reform proposals is the introduction of a mandatory accumulated pension system. Deductions from the salaries of Ukrainians will no longer go to the Pension Fund, but to the individual accounts of each taxpayer in the new State Accumulated Pension Fund. The Cabinet of Ministers has yet to develop a mechanism for its creation.
Lidia Tkachenko emphasized that such a system can be very useful, because the funds that will go to the savings fund can be invested, in particular, in domestic government bonds. This will create a guaranteed buyer for these bonds.
Point-based pension calculation system
The second part of the reform is a point-based pension calculation system. As part of this system, insurance contributions that citizens pay or have paid to the Pension Fund will be converted into points that will depend on the ratio of a person's salary to the average salary in Ukraine. Each year, the accrued points will be recalculated according to the current average salary, which will allow to maintain the relevance of pension benefits for those who have already retired.
Forecasts and challenges of the reform
Lidia Tkachenko emphasized that the issue of pension reform will remain in the center of attention of Ukrainians for a long time. In particular, she noted that the norm included in the draft law on the state budget for the next year does not contain enough specifics regarding the introduction of the pension reform. However, she suggests that this draft law may provide for a mandatory accumulative pension system.
Currently, a solidarity system operates in Ukraine, in which employed persons pay uniform social contributions, part of which goes to pension payments. The reform aims to gradually change this system to ensure a more stable and fair pension system in the country.
