IMF criticizes Ukraine’s pension reform

“Ukraine recently adopted the pension law… The pension law introduces some important provisions to modernize the pension system in Ukraine but also has some shortcomings that undermine incentives for people to work longer and to contribute to the system. It does not fully ensure a fair and sustainable pension system so we think a bit more work is needed to be done there,” Gerry Rice said.

As UNIAN reported earlier, the International Monetary Fund late November 2017 stated that it was still analyzing the pension reform adopted by the Verkhovna Rada in early November of last year, to check whether it included incentives for later retirement and, consequently, a larger volume of contributions to the Pension Fund.

Read alsoReuters: Ukraine passes privatisation law needed for IMF aidThe IMF noted that, to complete the fourth review of the cooperation program and receive the fifth tranche, Ukraine needs to ensure that the pension reform is consistent with the objectives of cooperation, including long-term financial sustainability of the Pension Fund; as well as pass a law on privatization, bring gas tariffs in line with import parity, create an anti-corruption court, and adopt a budget for 2018 with a deficit of no more than 2.5% of GDP.

Read alsoCabinet approves Pension Fund budget with UAH 139 bln "hole"The law on pension reform was adopted by the Verkhovna Rada on October 3 and entered into force on October 11, 2017. The document introduces the requirements for a minimum insurance period for retirement and raises pensions for 9 million pensioners by UAH 200 to UAH 1,000.

UNIAN memo. In March 2015, the IMF approved a four-year lending program for Ukraine, the Extended Fnd Facility, worth $17.5 billion. Within the program’s framework, the country received four tranches from the Fund totaling $8.7 billion.