A new Memorandum with the IMF has caused a lot of rumors about what Ukraine agreed to get $ 5 billion.
112 as reported, Ukraine has agreed “to encourage later retirement”.
At the same time, pensions should also be increased to “statistically measured minimum subsistence level”, because this is another requirement of the IMF.
The average pension in Ukraine as of the beginning of the year — UAH 3083. Survival in our country, economists estimate, you need at least 1.5-2 times more.
But Finance is not. After the introduction of coronavirus restrictions and concessions for the payer of ERUs to the Pension Fund in April came almost a billion less than in April 2019. The Fund’s expenses exceeded revenues by nearly UAH 5 bn.
And it is in this situation the funding of the Pension Fund increased by almost 30 billion. This amount was needed for payment of “Vovinam thousands” and the may indexing.
Total Pension Fund debt was almost UAH 50 billion, and this amount will increase over time, as the number of retirees more than the payer of ERUs.
International creditors fear that because of the deficit of the Pension Fund of Ukraine will be difficult to repay his debts to them, so in the memoranda are trying to prescribe the conditions which would minimize such a risk, in particular the increase of age, is required to pay.
Literally raising the retirement age in the Memorandum is not provided, however, increasing demands for seniority means an indirect increase in the retirement age.
Pension reform does not increase the retirement age in the literal sense, and only increase requirements on the amount required for the retirement of seniority. But actually this is a veiled increase in the retirement age.
The political strategist Ruslan Bortnik said that in the near future will primarily be the reduction of spending on pensions and social services. In this context, increases in pensions, according to experts, should not wait.
Save on “statistically reasonable” pension
“Statistically reasonable” pension, the Ukrainians will have to provide, in fact, themselves. After the introduction of the accumulative pension system except ERU citizens will be required to pay out salaries and additional contributions.
The Ministry of social policy recently presented a bill that in part introduces the mandatory funded pension for those who are not yet 35 years old, and for those employed in “hazardous” work. If lie will take it, the Ukrainians will choose pension funds for contributions since October.
To participate in the program will be voluntarily paying additional 3% tax per month out of pocket. In fact, it’s the same as the current system of voluntary savings.
What is the pension able to save the Ukrainians?
According to the estimates of experts with an average salary of UAH 10430 30-year-old Ukrainian at the age of 55 years will accumulate a little more than 219 thousand hryvnias. When you consider the average lifespan, in a month he will be able to 1825 UAH.
If this amount be added to the average pension in the country, it will be the actual cost of living is 4-5 ths.
In any case, while this is only a trial version of a funded system that applies only to a few dozen professions.
The bills on the full transition to the accumulative system, introduced deputies Galina Tretyakov and Natalia Korolevska.
Tretyakov, for example, suggested that pension contributions should be deducted and the employee and the employer in equal number, not more than 5%.
Financial analyst Growford Institute Alex Kush said that global economic crisis is not the best time for such reforms.
“This is a good topic to create long-term incentives so that people do not leave the country. But such measures do not run in large-scale crises like the current one podkarantinnogo”, — he said.
The expert also said that now the country’s economic conditions that many entrepreneurs was difficult to pay taxes, and the introduction of a funded system will increase the tax burden on business and it is wrong.
Analysts count: the introduction of “harmful” initiatives Minsotspolitiki will cost businesses an additional $ 2 billion per year. A large-scale launch of a funded system — in more than 100 billion hryvnia.
Such tax burden will lead to the fact that Ukrainian business will start being registered abroad or to go into “shadow”.
Experts also note that investing in private pension funds is a risky idea.
If the Fund is careless, it may lose your money. And even deposits in domestic bonds Treasury bonds — not the most reliable company.
“If the money is invested in government bonds, it is to keep them under the mattress. There are many examples when States in other countries “put the paw” on the pension assets and promised to give the citizens the money “later” — recalls Alex Kush.
Considering the factors of corruption in our country, experts do not exclude that at all Ukrainians will be left without their payments.
In addition, Ukraine has undertaken before the IMF to fix in the law “On mandatory pension insurance” the rate of annual indexation of pensions. That means more manipulation of the payments will not.
The head of the Ministry Marina Lazebnaya earlier also called for the consolidation of the legislation clear date indexing so that changes at the legislative level can be expected in the near future.
Also Ukraine in the Memorandum with the IMF pledged to refuse further discretionary increase in payments. The fact is that we no longer need to introduce new targeted incentives.
to queerbate growing hole in the Pension Fund. Instead of fighting poverty at the systemic level, to raise the standard of living of all pensioners, introducing a scatter payout, which can then be successfully cancelled. It is a measure of the lack of a comprehensive program, which was not gained during the year.
Unsystematic combat the shortage could lead to even greater growth and shifting the burden of pension provision onto the shoulders of the Ukrainians themselves is clearly insufficient.