Ukraine to be unable to pay pensions in 15 years over demographic situation – PM Shmyhal

Ukrainian Prime Minister Denys Shmyhal says Ukraine will have no resources to pay pensions in 15 years over the demographic situation in the country.

Read alsoOfficial comments on prospects for raising retirement age for womenThe comment came as the official spoke with students of Lviv Polytechnic National University, as reported by the Ukrainian online news outlet Obozrevatel on October 3.

Shmyhal says one employee will have to support two pensioners over the demographic situation in the country. It will be almost impossible to do so. Therefore, the government "will be unable to pay pensions" in 15 years.

"There will be not enough able-bodied citizens, but many retirees. The 1-to-2 ratio. We will have to double taxes so that we could support pensioners," he said.

"Companies no longer want to boost taxes. Doubling them is impossible. We'll be unable to pay retirement benefits to future pensioners in 15 years. It's simple mathematics," he added.

According to Shmyhal, as early as in 2021, the Cabinet of Ministers will launch a funded pension system: every employee will be able to save funds for old age. The state will pay only a "small social pension," while citizens will have to save the rest of the funds on their own.

"We'll be creating a funded pension system next year. And then we will have a small social pension provided by the state and have funds from savings," he added.

Pensions in Ukraine: Background

• The Cabinet of Ministers plans to introduce a funded pension system in Ukraine from 2021 and stimulate the development of a private pension system.
• The Cabinet also intends to adapt to the EU laws Ukrainian legislation on private pension funds to enhance protection of property rights and interests of pensioners, according to the finalized action plan.