STANDARDIZATION OF IMPLEMENTATION OF THE MANDATORY PRIVATELY MANAGED PILLAR OF THE PENSION SYSTEM OF UKRAINE

Abstract

According to the current legislation, the modern Ukrainian pension system is not yet fully formed. In Ukraine, PFU contributions are currently a source of pension benefits for today’s retirees. Pay-as-you-go pension system is essentially failing, because as in the rest of the world, our country is experiencing a trend in which the nation is aging: the share of retirees is growing, and the share of able-bodied people is declining. The search of new ways to save for old age is moving toward the creation of mandatory accumulation under the supervision of the state, in particular, this is also caused by the signed by Ukraine Memorandum of Cooperation with the IMF. However, despite the long-term pension reform in Ukraine (in started back in 2004), today, in fact and in law the second level of the pension system doesn’t function and doesn’t exist – the mandatory accumulative one; as well as very underdeveloped, almost non-functioning and completely unpopular among the population is non-state pension system, which forms the third level of the national pension system. Still, against the background of active cooperation with the IMF a number of reforms continue in Ukraine, so in 2019 work on new legislation on the defined contribution pension system began. It is this level of the pension system that can technically increase the level of pensions and their differentiation. Yet the experience of countries that have already carried out such reforms shows that the real effect can be expected for at least 10–15 years, or even 25 years, and in some cases such an effect will not be reached at all. The article is devoted to the issues of legislative implementation of defined contribution pensions. According to the results of an expanded analysis of 27 bills on the referred issue in the period from 2016 to 2021, it can be stated that there is no unifying concept for the reform in the legislative field, so most bills are either withdrawn or sent for revision. In general, the bills of 2016–2020 drew attention to the scattering of changes, which mostly concern certain issues of pension legislation, mainly for vulnerable groups. The new projects, which were sent for consideration in 2019, mainly deal with defined contribution level of pension system. However, even they are constantly rejected, refined, returned for consideration and go through the whole procedure again from the beginning.