According to the prime minister, such increase in pensions will provoke at least three times higher Pension Fund deficit.
Ukraine’s PM has presented the Cabinet a new law on pension reform providing for the minimum pension increase up to 3,764 hryvnia ($144) from Oct. 1.
Prime Minister of Ukraine Volodymyr Hroisman is ready to present a pension reform in the near future and hopes that with the support of Ukrainian lawmakers this reform can be adopted by the end of the current parliamentary session.
The head of the Social Policy Ministry says the retirement age in Ukraine will not increase. However, a citizen must earn a certain term of service enough for retirement. The draft bill on the pension reform is ready.
The final version of pension reform has not yet been developed. The Ministry of Social Policy of Ukraine is considering various options and principles of reform. It will be possible to talk about the final version only after it is publicly discussed, considered by the Cabinet of Ministers, and submitted to the Verkhovna Rada of Ukraine.
The Cabinet of Ministers of Ukraine intends to make the Pension Fund unsubsidized and significantly improve state's social support system as part of a medium-term development plan until 2020.
Decreasing the deficit of the Pension Fund and increasing the size of pensions is a strategic task for the government in 2017.
The Pension Fund has filed an appeal against the court's decision on the resumption of the retirement benefit payment to ex-Prime Minister of Ukraine of Yanukovych tenure Mykola Azarov.
The task of the Ukrainian government in the negotiations with the International Monetary Fund is to show that there are alternative solutions.
The Ukrainian government promises to fulfill all its commitments on social benefits and pensions, despite the difficult situation in the Pension Fund.
Basic pensions of many Ukrainians are below the minimum subsistence level, so they receive extra payments from the Pension Fund.
The Cabinet’s task is to provide a fair pension coverage system that would ensure an adequate level of social support for Ukrainian citizens and overcome the pension funding shortfall.
The gap between the Pension Fund revenues and the payments it should perform this year is about 81 billion hryvnia (about $3,240 billion).
Prime Minister Volodymyr Hroisman estimates the Pension Fund deficit at UAH 80 billion (approx. $3.121 billion).
Effective June 1, 2015 assignments of special pensions to deputies, ministers, judges,prosecutors, customs officers, fiscal officers and other civil servants will be stopped.