Improvement of the Pension System in Ukraine
Journal Title: Бізнес Інформ - Year 2015, Vol 11, Issue 0
Abstract
The article allocates the benefits of funded pension system, in particular, differentiation of pensions depending on salary and efficiency of use of pension savings. It is specified that with introduction of the second level and improving the functioning of the third level attention should be paid to the large amount of administrative costs, whereby reducing administrative costs (i. e. increasing stability of the funded component of pension system) can be achieved by lowering the amount of remuneration to the subjects of institutional infrastructure. It has been noted that a pension system with notional accounts is advisable to introduce with consideration of the funded component, which is mandatory. The article emphasizes inconsistency of the reformed pension system towards the criteria of sustainability, acceptability of costs, fairness, as well as partial inconsistency towards the criteria of sufficiency, reliability, predictability, which leads to an increase in the deficit of the Pension Fund of Ukraine and baselessness in determining amounts of pensions. It has been stated that to achieve an adequate replacement rate within 60-70%, which would guarantee to the future retirees sufficient wealth, will be impossible using the distribution system only. Therefore, priorities of the distribution component must include responsibility for ensuring future revenues. The formation of an effective mandatory funded system should be accompanied by adequate guarantees by the State along with a rational administration policy to prevent excessive share of management costs.
Authors and Affiliations
Kateryna Vaskivska, Olena Danyliuk
Keywords
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