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 Ukraine’s pension system on the brink of collapse, social policy minister says

Ukrainian Minister of Social Policy Andrii Reva believes the domestic pension system is heading for a large-scale disaster.

As reported by Censor.NET citing 112 Ukraine TV channel, the minister says that the Pension Fund revenues cover only 50 percent of pension benefits.

"Today we find ourselves in a situation where the minimum pension is 1,247 hryvnia (about $47), while several hundred thousand people still receive 949 hryvnia in pension benefits and an average pension in Ukraine is 1,823 hryvnia. We have about 12 million pensioners while the Pension Fund can cover only a half of these meager pension payments. The second half is being subsidized from the budget. Is this normal?

Read more: Accumulative system stipulates transfer of pension by inheritance, - Vice Premier Rozenko

"Do we actually need the IMF to see that we have a looming disaster, that we have a miserable level of pensions? We now subsidize a half of pension benefits from the budget. Our country is at war and it spends 134 billion on national defense and security while 140 billion is spent to subsidize the Pension Fund. Moreover, we have the lowest level of pensions in Europe.

"Therefore, we don't need the IMF to realize this. We should ask the Ukrainian authorities how comes that we are facing a possible disaster, whereas it can well be a large-scale disaster?" the minister said.

Read more: Pension system to disintegrate in decade at most unless steps taken, - Minister Reva

As reported by Ekonomichna Pravda, IMF Mission Chief for Ukraine Ron van Rooden wrote in his article that the Fund considers it premature to introduce the second stage of the pension system. In turn, Ukraine's Vice Prime Minister Pavlo Rosenko said that the Cabinet was developing its own version of the pension reform.
 
 
 
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