ISSUES AND FUTURE DIRECTIONS OF ACCUMULATIVE PENSION PROVISION IN UKRAINE

Abstract

This article thoroughly examines the current state and persistent challenges of non-state pension funds (NSPF) in Ukraine. The research underscores the critical relevance of a robust accumulation-based pension system in the face of ongoing demographic shifts and the increasing strain on the traditional solidarity-based pension model. The study employs a systematic analytical approach, drawing on publicly available data and regulatory reports to assess the operational dynamics of NSPFs. It critically evaluates their market penetration, asset management strategies, and overall financial performance. Qualitative analysis is utilized to identify underlying factors contributing to the observed limitations, including public distrust, insufficient financial literacy among the populace, and the prevailing investment landscape. Quantitative methods are applied to assess the impact of administrative fees on long-term capital accumulation, highlighting the disproportionately high costs borne by participants. The findings reveal a significant underutilization of the NSPF system by the working-age population, largely due to a combination of factors such as inadequate real incomes, a general lack of confidence in financial institutions, and the absence of a diversified range of secure investment instruments. Furthermore, the analysis points to structural deficiencies within the regulatory framework, including fragmented oversight and a lack of clear fiduciary obligations, which collectively hinder the effective and transparent management of pension assets. The study highlights that despite the legal provisions for diversifying investment portfolios, a substantial portion of NSPF assets remains concentrated in low-yield government securities and bank deposits, impeding their potential as a catalyst for broader economic development. The practical value of this research lies in its concrete recommendations aimed at enhancing the efficiency and attractiveness of the NSPF system in Ukraine. These recommendations focus on developing targeted programs to boost financial literacy, diversifying investment avenues to include more robust and profitable instruments, and crucially, implementing regulatory reforms to significantly reduce administrative costs and improve overall transparency. The article also suggests strengthening the supervisory framework to ensure greater accountability and safeguard participants' savings. Ultimately, the insights provided offer a roadmap for policymakers and stakeholders to foster a more reliable, sustainable, and participant-centric non-state pension provision that can effectively supplement state pensions and contribute to the nation's economic stability and growth.