Pension Fund of Ukraine: Current State and Prospects for Reform

The Pension Fund of Ukraine is a complex entity with a rich history. Established in 1991, it has been responsible for managing the country's pension system ever since.

The Fund has undergone significant changes over the years, with the most notable reform being the introduction of the universal pension system in 2016. This change aimed to ensure that all citizens receive a basic pension, regardless of their work history.

As of 2020, the Pension Fund of Ukraine had over 22 million pensioners, with the average monthly pension standing at around 2,000 hryvnias. This represents a significant increase from the average pension in 2016, which was approximately 1,400 hryvnias.

The Fund's budget for 2020 was approximately 150 billion hryvnias, with the majority of funds coming from the state budget.

The Pension Fund of Ukraine faces several challenges, including a significant deficit in its budget, which stood at 1.3 trillion hryvnia in 2020.

One of the main reasons for the deficit is the increasing number of pensioners, which puts a strain on the fund's resources.

The Ukrainian government has proposed several solutions to address the issue, including increasing the retirement age to 65 for both men and women.

However, this proposal has been met with resistance from various groups, including trade unions and pensioners' organizations.

The government has also introduced measures to increase the efficiency of the pension fund, such as implementing a new information system to improve the processing of pension payments.

The Pension Fund of Ukraine plays a crucial role in ensuring the target use of funds for pension payments. The fund submits proposals to the Ministry of Labor and Social Policy of Ukraine on state pension policy formation.

One of the main challenges is the subordination of the Pension Fund's activities to the Cabinet of Ministers of Ukraine through the Ministry of Social Policy of Ukraine. This can sometimes lead to bureaucratic delays in decision-making.

Fortunately, the Pension Fund of Ukraine has a clear responsibility to control the implementation of official legislative acts. This helps maintain accountability and transparency in pension payouts.

To overcome the challenge of bureaucratic delays, it's essential to have a clear understanding of the Pension Fund's role and responsibilities. By doing so, we can better navigate the system and ensure that pension payments are made efficiently.

Automated Pension Recalculation is a game-changer for working retirees in Ukraine. The Pension Fund of Ukraine automatically recalculates pensions for citizens who have found jobs after retirement.

This process ensures that retirees receive payments based on the current subsistence minimum indicators, which may be different from the outdated ones used at the time of pension appointment.

Since 2018, the Pension Fund has been doing this automatically without the need for additional applications from retirees. However, to avoid potential problems, retirees must timely inform the Pension Fund about their employment and dismissal.

If a retiree fails to report a change in employment status, they may have to return excess funds credited due to overpayments.