July 5, 2023, 17:54

Reforming the retirement system: what needs to be done today to address the issue

According to the Pension Fund of Ukraine, as of the beginning of 2023, there were 10.7 million pensioners in Ukraine, compared to 200,000 more at the beginning of 2022.

The ratio of insured people to retired people is 1:1, and given the increase in life expectancy and migration, the situation may worsen, which will negatively affect the financing of PAYG pensions.

Thus, the issue of substantial reform of the retirement system is becoming more acute.

It was discussed at the  Media Center Ukraine – Ukrinform during a discussion of the issues and prospects of reforming the retirement system of Ukraine in the context of European integration and war. Regarding Ukraine’s European integration, based on international practices, strategies, and EU norms, there are already important aspects that should be taken into account in the development of a new or reform of the existing retirement system in Ukraine.

Marianna Onufryk, an expert at ANTS National Interests Advocacy Network NGO, emphasized it. “This is much broader than we think about the retirement system. It is also about the standard of living and the general level of well-being. It is also about demography, healthcare, and other public spending on the elderly.”

At the same time, she drew attention to two critical areas related to the retirement system in the context of Ukraine’s membership in the EU,” she said.

At the same time, she emphasized two key areas concerning the retirement system in the context of the accession of Ukraine to the European Union. 

“If you read the reports that the European Commission has prepared and presented to Ukraine, particularly as of February 1, 2023, the first area concerns the social security system in general, which, among other things, sets out the parameters of the retirement system. And Ukraine does not yet fully meet these parameters. The second area is the labor movement. It is very important in the context of the labor force, when the borders are open when people are free to move and work in one country or another, it is very important, in particular, that pensions are regulated in Ukraine,” she explained.

During the discussion, Oleksandra Betliy, an expert at the Institute for Economic Research and Policy Consulting, emphasized the importance of the demographic issue within the context of pension reform. She is convinced that we need to conduct a census immediately after the victory.

“We need all the improvements to the retirement system and all the reforms after the calculations. To understand what we have, who will invest money, who is the one to pay,” she said.

In addition to a number of essential aspects that need to be worked on, including for the reform and further smooth operation of the retirement system, and financial benefits of citizens, one of the equally important is financial literacy.

“That is why there should be financial literacy subjects at school, financial education in the workplace, convenient informing the population about the expected pension, convenient applications for informing about possible investments,” she added.

Summarizing, she noted that it is important to achieve a certain public dialog and state communication on the issue of the retirement system.

Read more: https://mediacenter.org.ua/news