Funded pensions: the system is already being tested in Ukraine

The President of Ukraine Denis Shmigal said that the Pension Reform accumulation system has already begun to be tested in Ukraine.

He wrote about this on Facebook, summing up the results of the last week.

“This week, the government introduced a pension savings mechanism for workers at large privatization facilities. Future owners of such enterprises will have to pay savings contributions to non-state pension funds for at least half of the workers,” – wrote Shmigal.

The prime minister wrote that the amount of such contributions must be at least 4% of the salary. And for the country, testing the system was another step towards introducing the accumulative level of the pension system for all Ukrainians.

He is convinced that the Verkhovna Rada will support the corresponding bill.

Employer contributions

The Ministry of Social Policy has proposed a model of compulsory accumulation of pensions, according to which employers will pay compulsory contributions, and employees – voluntary.

The Ministry of Finance, together with the World Bank mission, propose that employers pay mandatory contributions to the individual accounts of people in the amount of 1% of wages (by reducing ERUs) for all their employees.

Also, the state will transfer an additional 1% to the accounts of those who have not refused accumulation contributions.

Earlier we reported that the Pension Fund is asking the government to increase the budget by UAH 4.34 billion. The money is needed in order to pay the promised increased minimum pensions to citizens over 65 years old.

Let us remind you that Ukrainians who have not accumulated the necessary work experience. having reached retirement age, they may be left without payments.