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 Pension fund bankrupt, lacking 80 billion hryvnia for pensions – Social Policy Minister Rozenko

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The Pension Fund lacks 80 billion UAH for payment of pensions in the amount existing today.

Minister of Social Policy of Ukraine Pavlo Rozenko notes that the main resource to fill the budget of the Pension Fund today is taking unshadowing wages.

He stated this in a program on Channel One, Censor.NET reports citing the Cabinet's official website.

According to Rozenko, the Pension Fund lacks 80 billion UAH for the payment of pensions in the amounts that exist today. "To put it bluntly, it (the Pension Fund - ed.) is bankrupt, and without help this state financial institution would simply not exist," he said.

Read also: Retirement age in Ukraine will not be increased - Head of Pension Fund

Pavlo Rozenko noted that due to the joint principal position of the president and the government negotiation group, the key requirement of the IMF regarding balancing the budget of the Pension Fund by raising the retirement age to 65 years was avoided. "Negotiations with the IMF were very difficult, and the first version of the IMF memorandum demanded to increase the retirement age to 65 years, but thanks to our joint position we managed to move away from this key requirement," the minister said.

"Will we have to come back to the issue of raising the retirement age depends on how quickly we will manage to unshadow the wages and how quickly the economy will provide resources. 200 billion UAH is paid annually in the shadow sector, for which no taxes are paid. Today it is the primary resource of the Pension Fund," Rozenko said.

He also said that the Ministry of Social Policy has developed a draft law on the introduction of a defined contribution pension system, which will soon be submitted to the government and parliament for consideration.

Read also: Hroisman holds meeting of the Board of coalition and members of the government to discuss changes in the state budget-2015

"I count on the support of expert as well. It is necessary to batter this wall, because now is the time for drastic changes in order to eventually start a pension reform so that the younger generation can see its perspective, so that it is an incentive to work legally," the minister said.

Speaking about the increase of pensions in the near future, Rozenko said: "To promise that we will rapidly increase pensions and wages in a period of severe economic crisis throughout every area would be a hoax. Today, the country needs to survive and do everything possible to carry out economic and social reforms that will give results in the near future."


 
 
 
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