Ministry of Social Policy hopes to introduce funded level of pension system from 2023

The Ministry of Social Policy hopes for the adoption of bills No. 4408 and No. 2683, which will allow starting the introduction of the second, funded tier of the pension system for workers of harmful, large enterprises from 2022 and for everyone from 2023, Minister Marina Lazebna has said.

"Now we are faced with the task of introducing a mandatory funded system," she said at the Pension Forum, which took place in Kyiv on January 27 and January 28.

According to a presentation by Lazebna, the first bill will make it possible to attract 100,000 participants to the second tier with annual contributions of UAH 2 billion, the second – 10 million with contributions of UAH 30-40 billion per year.

According to the ministry's estimates, today 60%, or 6.5 million people receive a pension of up to UAH 3,000, and the average pension is UAH 3,500 as of January 1, 2021, having increased by UAH 425 over the year.

"There is an explanation for such indicators: contributions are paid by 13.2 million employees, and pensions are received by 11.2 million pensioners," Lazebna said. According to her, the de-shadowing of the labor market and wages did not take place, so the Pension Fund was not filled with funds to raise pensions.

As the minister said, if this situation persists, the replacement rate – the ratio of pensions and wages – will drop to 18% by 2055 from 28.7% in 2020 and 53.9% in 2010.

Lazebna also said that in 2020, the Pension Fund received UAH 197.7 billion of transfers and subsidies from the national budget, and the fund's expenses compared to the national budget expenditures amount to 37.7%.

Source: www.en.interfax.com.ua