Photo from UNIAN
Raising the retirement age in Ukraine, as one of the ways to reduce the deficit of the Pension Fund, is a political decision, which the government will not be supporting at the moment, Ukrainian Social Policy Minister Andriy Reva told reporters ahead of the government meeting.
According to him, the retirement age is the subject of debate between Ukraine and its key, the International Monetary Fund (IMF).
"Now we have a draft memorandum with the IMF and proposals of the parties. There are no clear and agreements which have been signed off but we have an ongoing discussion. However, it may last until the political demands are removed. I believe that raising the retirement age is a political demand," the minister said.
Read alsoMinister of Social Policy says what Ukrainian should expect from pension reformHe also stressed that there two ways to reduce the budget deficit of the Pension Fund: reduction of the number of pensioners by raising the retirement age or increasing the number of people paying contributions to the Pension Fund. The proposal of the Ukrainian government aimed at increasing the number of contributors by unshadowing economy and salary payments.
"It is clear that I don't take political decisions as they are made by the government, parliament and president. However, in my opinion, there is no reason to raise the retirement age in Ukraine. We have 26 million able-bodied citizens, while only ten million citizens pay contributions [to the Pension Fund]. Do we have an opportunity to increase the number of those who pay [contributions]? Why should then we lay off those who receive pensions? In economic terms, we have already shown our proposals on pension reform to [the IMF]," Reva said.
As UNIAN reported earlier, the government insists on the introduction of the pension reform in Ukraine because the accumulated imbalances do not allow paying decent pensions and thus require significant budgetary infusions. At the same time, the government calls the reduction in the budget deficit of the Pension Fund a key objective of the pension reform.
Pension reform is a part of the reform program approved by the IMF. However, the memorandum signed between the government of Ukraine and the management of the Fund in September 2016, does not contain strict rules about raising the retirement age, holding only a recommendation to reduce the deficit of the Pension Fund because as at the moment it is covered by budgetary funding. Budget subsidies in the Pension Fund budget for 2017 exceed UAH 140 billion. The dialogue with the IMF on this issue is underway.