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Vice Prime Minister of Ukraine Pavlo Rozenko says a funded pension system will begin to operate in Ukraine as early as January 1, 2019.
"I understand that we need to do a lot to implement the funded [pension] system, but we will be technically unable to do that before January 2018. However, let's take a clear political decision that it will come into effect from January 1, 2019. We need a year and a half to make amendments to the current legislation, develop the system and test it, as the bills have already been registered and can be adopted," Rozenko wrote on Facebook.
The official said that delaying this process for another year, and even two or five years, will lead to the fact that a whole generation of pensioners will again be doomed to poverty, which should not be allowed.
"If we put our emotions and opinions of international organizations aside, I think our current pension system does not suit anyone, neither the state represented by the Pension Fund which receives enormous funds covered by the budget expenses, nor retired people who get scanty pensions," Rozenko noted.
Read alsoPM Groysman highlights pension reform basicsAccording to him, it's not only the International Monetary Fund that forces the government to carry out the reform. The government is motivated by the fact that today the Ukrainian pensioners remain below the poverty line.
"In fact, I would like the Verkhovna Rada to adopt a comprehensive pension reform, which would include what the government has already introduced, and those things that refer to the introduction of the funded system, as we need to provide the foundation for future generations of pensioners. We must do that right now without postponing this issue for five, 10 or even 15 years," Rozenko added.
As UNIAN reported earlier, the Verkhovna Rada adopted a draft law on pension reform in the first reading on July 13.
The government's draft pension reform does not provide for raising the retirement age, at the same time it introduces requirements for the minimum pension insurance record. So, a person will need to have at least 25 years of pensionable service to retire at age 60, whereas retirement at 63 will be possible with the pension insurance record from 15 to 25 years, and at 65 if it is less than 15 years. At the same time, people without the pension insurance record will be eligible to apply for social assistance when they reach 63. The size of assistance will be determined based on the income level of the pensioner's family.
The minimum pension insurance record will be extended by one year every 12 months until 2028. Thus, starting from 2028, a person needs to have 35 years of pensionable service to retire at 60. At the same time, the government version of the pension reform provides for the possibility of "buying" up to two years of the pensionable service. The reform also abolishes special long-service pensions paid to state officials, introducing a single formula for calculating the amount of pensions.