“Catastrophe” or “a difficult situation”. How to deal with the deficit of the Pension Fund

"Катастрофа" или "непростая ситуация". Как будут бороться с дефицитом Пенсионного фонда

In Ukraine heading for disaster with the pension payments, said social policy Minister of Ukraine Andriy Reva. According to him, the Pension Fund deficit now stands at 145 billion USD.

“If in 2014, the deficit of the Pension Fund amounted to 80 billion USD and it was a question how it to cover, it was decided to tax pensions that gave 1 billion 800 million a year decided to reduce the rate of single social tax from 38% to 22%. After that some of our economists have argued that once we reduce the rate of the unified social contribution, the shortfall of funds overlaps. It has been 5 months and I want to tell you that the Pension Fund deficit, which last year amounted to 80 billion USD, is now 145 billion USD. That is, we took 65 billion USD and given to big business, hoping that he was ashamed, and he will return through higher wages and payment of contributions to the Pension Fund. This did not happen”, – said the head of the Ministry of social policy.

In a loud statement Reva responded, his predecessor and now Deputy Prime Minister Pavlo Rozenko. According to him, in PF not a disaster, but “a complicated situation”.

“Certainly, the financial situation of the Pension Fund is not easy, but I convinced them and I assure you that no disaster in the Pension Fund will not. Pensioners have nothing to worry about, the government will provide timely and in full, paying all their pension commitments to employees. The necessary funds for this purpose in the state budget is. Moreover, there are means and increasing the minimum pension from may, and funds to increase minimum pensions, which will take place from 1 December 2016”, – said Rozenko.

Way out

The Ministry of social policy plans until September 2016 to prepare a package of 4-5 of bills, the purpose of which will be, if not a cover then at least reduce the deficit of the Pension Fund. Among the planned steps:

– To increase the number of contributors to the ESV, reducing the number receiving benefits on payment of fee.

– Introduce minimum social contribution: 640 UAH for salaries up to 2 900 USD, 22% for salaries above this amount. The Ministry believes that there will be no sense to pay wages less than two living wages and write yourself a minimal salary, and the rest to the envelopes.

– At the level of the discussion: to provide for the payment of a pension to people without experience with only 63 years, which should create an incentive to pay ERUs.

Rozenko believes that such a system will enable the Pension Fund to become more self-reliant financial institution is not as dependent on the state budget. The government will not revise the decision on the amount of the single social contribution.

“This is a principled position of the government. Ago – to an increase of ESV – no action will not take place. The policy of the state is going to decrease taxes,” he said.

The Pension Fund head Oleksiy Zarudny has reported that payments are made on time, despite the deficit. The solution to the problem the officer sees as the increasing number of payers ERUs, and in the introduction of a funded system. In accordance with the government bill number 4608, the pension reform can start from 1 July 2018 For the Ukrainians are going to introduce second level of pension provision by creating a special personal pension accounts, which will transfer the payments of salary.

Vice-speaker of Parliament Oksana Syroid made for the audit of PF. She predicts that in the records “stuck” more than one million “dead souls”, which today is paid the money. Such an audit would be a first in the history of independent Ukraine.

We will remind that the Verkhovna Rada of Ukraine intends to exempt pensions from taxation. In the governmental bill No. 4542 “On amendments to the Tax code of Ukraine regarding exemption from taxation of the pensions in the first reading as the basis voted 307 MPs.