PENSION SECURITY IN UKRAINE: REFORM PROBLEMS

Abstract

Modern military and economic challenges necessitate a balanced, economically justified reform of the pension system of Ukraine. The purpose of this work is to study the problems of pension reform in Ukraine, in particular, the introduction during the war of a cumulative system of mandatory state pension insurance and a new formula for calculating pensions in a solidarity-based points system. The study of the problem was carried out by applying the methods: normative and comparative analysis, system-structural, prognostic and generalization. As a result of the study of the problems of reforming the pension system, it was determined that a successful reform is possible under conditions of sustainable economic development and growth in population incomes. It is shown that the introduction of a cumulative system of mandatory state pension insurance in difficult conditions of war, demographic and economic crisis, without real guarantees of the preservation of pension savings - has great risks of obtaining a negative result. The government should take into account the negative experience of introducing the second pillar of pension provision in Eastern European countries. At the current stage, it is advisable to postpone the introduction of a mandatory funded pension system. The advantages and disadvantages of the reform of the solidarity pension system regarding the calculation of pensions by points are determined. The advantages include the elimination of the difference between the amounts of pensions assigned in different years with the same indicators. For persons who received a salary at the level of the average salary in the country and below, the amount of the pension will be slightly higher under the point system. The disadvantages include the fact that the basic pension is less than the subsistence minimum. For those whose salary exceeds the average salary in the country, the amounts of pensions under the point system will be lower than those calculated using the current formula. Recommendations are provided to eliminate imbalances in the practice of the current pension system of Ukraine.