scholarly journals Problematic aspects of the regulatory and legislative framework for calculating pensions in Ukraine

2019 ◽  
pp. 71-80
Author(s):  
Lina Diakovych
Keyword(s):  
Pension System ◽  
Pension Reform ◽  
Legal Framework ◽  
Retirement Age ◽  
European Economic Area ◽  
Defined Contribution ◽  
Average Life Expectancy ◽  
Legislative Framework ◽  
State Pension ◽  
Pension Payments

Introduction. In order to further move towards the European Economic Area, Ukraine needs to take pension reform measures. Pension provision in Ukraine has to be profoundly reformed in terms of regulatory and legislative framework for calculating pensions in Ukraine. What is of particular importance is improving Ukraine’s laws and methods for calculation and pension payments to citizens. Another important focus of the reform agenda is to define categories of people eligible for old-age pensions, disability pensions, and long- service pensions. Purpose. The purpose of the article is to interpret the regulatory and legislative framework for calculating pensions in Ukraine; to describe changes in pension payments before and after the reform was implemented; to highlight ways of improving pension payments in terms of regulations and legislation. Methods. The research methods used in the article include: analysis; comparison; historical method to consider the legislative framework for calculating pensions at different periods of time. Results. The regulatory and legal framework for calculating pensions in Ukraine is a complex system comprising the Constitution of Ukraine, the Laws of Ukraine, the Labour Code of Ukraine, decrees, Presidential decrees, International agreements and laws of the USSR. Some of these regulations and legislation need to be revised and amended in order to bring them in line with contemporary practices and modern standards. It is claimed that since 2017, Ukraine’s government has been implementing the pension reform aimed at relieving the pressure on the working-age population and improving living standards for retired people. In particular, the retirement age has been raised, eligibility criteria for preferential pensions have been revised, and methods for calculating pensions have been changed. The Ministry of Social Policy of Ukraine argues that the new pension reform is expected to enhance social, labour and post-retirement relations, to increase tax revenues through reporting real salaries, to develop a framework of social justice when calculating pensions. The author points out that the regulatory and legislative framework for calculating pensions is outdated at this stage and it requires changes. The considered changes are as follows: the establishment of a working group for entitlement of preferential pensions; the introduction of wage differentials by industries and occupations; the increase of pensions in line with inflation and age; the implementation of notional defined contribution pension system; the introduction of the new Labour Code and Pension Code, which are expected to regulate labour and post-retirement relations and meet modern standards. It is also indicated that continued employment should be enforced by legislation and a system of granting advantages and social security benefits to those who retire later needs to be developed. In terms of legislation, sufficient regard should be given to non-state pension schemes, defined contribution pension systems, and the principle of fairness when it comes to pension entitlements. It is also crucial to adjust pension amounts and retirement age to align with the sustainability ratio and the average life expectancy. Discussion. Further research of regulatory and legal framework for calculating pensions in Ukraine should be focused on the development of the Pension Code and improvement of the existing laws relative to pension calculation and payment. The author also suggests differentiating minimum wages by industries and regions and countering the illicit labour market and campaigning against payments ‘in envelope’, because official wages are the basis for calculating pensions.

scholarly journals The Pension System in Ukraine – Some Aspects of Reforming

2021 ◽  
Vol 6 (521) ◽  
pp. 176-183
Author(s):  
M. M. Furdak ◽  
Keyword(s):  
Social Protection ◽  
Pension System ◽  
Pension Reform ◽  
Pension Insurance ◽  
State Institutions ◽  
Accumulation System ◽  
Asset Value ◽  
State Pension ◽  
Pension Payments ◽  
Compulsory State

This publication is aimed at studying the processes and defining the main problems in reforming the pension system of Ukraine. The article analyzes the state of functioning and development of three levels of pension provision at the present stage of socio-economic development of the country. It is determined that only level 1 actually works in Ukraine – the solidarity system of compulsory State-controlled pension insurance, while the mandatory accumulation system has not acquired its development, and the voluntary accumulation system has an extremely low share in the general pension system. Some financial results of the Pension Fund of Ukraine for 2020 and the approved budget for 2021 are analyzed. Substantiated conclusions have been drawn about the problems of the solidarity system, such as: the existing budget deficit of the Fund, which leads to the formation of its debts; low, socially unadapted level of pensions; disparities in the size of pensions assigned in different years. The rating of currently operating non-State pension funds of Ukraine (the third level of pension provision) are analyzed according to the criteria of asset value, number of participants, amounts of pension payments and profitability, as well as the dynamics of some basic indicators of their activity. It is determined that the functioning of the non-State pension system in the country is hampered, in particular, for psychological reasons due to the population’s distrust of non-State institutions. Since the second level of pension provision – the mandatory accumulation system – has not yet started working in the country and taking into account the problems of the first and third levels, a reasonable conclusion has been made on the inhibition of the pension reform in Ukraine and the need to intensify the work on the implementation of all three levels of pension provision in order to achieve a sufficient level of social protection of citizens.

scholarly journals PENSION REFORM: ECONOMIC RISKS OF REALIZATION OF CONSTITUTIONAL RIGHTS OF THE INSURED PERSONS

2016 ◽  
pp. 0-0
Author(s):  
Аркадий Соловьев ◽  
Arkadiy Solovev
Keyword(s):  
Pension System ◽  
Pension Reform ◽  
The State ◽  
Retirement Age ◽  
Constitutional Rights ◽  
General Increase ◽  
Strategic Objectives ◽  
Rigid Connection ◽  
The One ◽  
State Pension

Among the instruments of pension system regulation (record of service, earnings, contributions, privileges), the legislatively regulated parameter “retirement age” occupies a special place. Now we observe the process of “aging of the population” because of the general increase in life expectancy on the one hand, and the growth of the total number of pensioners, on the other. At the same time, the tendency of increase in expenses on financing the state pension obligations remains. However, even on the basis of the specified facts identification of aging of the population with the budgetary crisis and the establishing of a rigid connection between the pension budget expenses and the growth of the number of pensioners and the general aging of the population looks more or less convincing only at first sight. The scientifically-based solution of the retirement age problem lies not in the course of receiving a tactical — economic — result (saving of budget expenses), but in achieving of strategic objectives of the insurance pension reform: providing of the constitutional guarantees on adequacy of the pension rights of the insured persons and the state pension obligations.

scholarly journals NON-STATE PENSION INSURANCE AS A SUPPLEMENT TO SOLIDAR PENSION SUPPLY

2019 ◽  
pp. 102-109
Author(s):  
O. Boiko
Keyword(s):  
Life Expectancy ◽  
Pension Fund ◽  
Pension System ◽  
Insurance Companies ◽  
Retirement Age ◽  
Pension Insurance ◽  
Average Life Expectancy ◽  
The World ◽  
The Right ◽  
State Pension

The main prerequisites for the emergence of problems of the pension system functioning in Ukraine, namely the solidarity system, are considered in the article. The budget, expenditures and deficit of the Pension Fund of Ukraine in the period 2010-2018 are analyzed. The amount of pensions was calculated taking into account the change in the dollar exchange rate and the inflation rate for the analyzed period and it was proved that the increase in the size of the pension does not lead to its actual growth. Emphasis is placed on the principle of calculation of pensions and attention is paid to the concept of a single social contribution, which has the minimum and maximum possible sum of payment. Based on the data, the author compared the size of the minimum (state) pensions in different countries of the world and in Ukraine and showed that the size of the pension is the lowest among the compared countries. An important aspect of the study was the comparison of average life expectancy. This suggests that the increase in life expectancy is causing the states of the world to raise the retirement age in order to delay the payment of state pensions. Alongside this the alternative to state pensions are private pensions. During the working period, every citizen has the right to make savings in different financial institutions as they have the right to invest. Funds that have been saved and multiplied are the main source of retirement income. Voluntary pension institutions are also envisaged in Ukraine. However, despite the legislative support and the general need to have their own retirement savings, citizens do not actively take the opportunity to create additional pensions. The reasons for this are lack of awareness of the population by the state about the essence of the pension reform, the general economic situation in the country, as well as the lack of financial literacy of the population itself, the unwillingness to take responsibility for their future and the low level of income. On the basis of these data, the need for active involvement of both public administration and citizens in the cumulative system is substantiated. Keywords: retirement age, pension fund, cumulative insurance, life insurance companies.

ACTIVITIES OF NON-STATE PENSION FUNDS IN THE FIELD OF EARLY NON-STATE PENSION PROVISION

2020 ◽  
Vol 16 (5) ◽  
pp. 248-252
Author(s):  
EKATERINA YUDINA ◽  
Keyword(s):  
Early Retirement ◽  
Pension System ◽  
Pension Reform ◽  
Federal Budget ◽  
Legal Framework ◽  
Pension Funds ◽  
Retirement Pension ◽  
Insurance Premiums ◽  
State Pension ◽  
State Pension Funds

The system of early retirement pensions was inherited from the USSR and every third Russian pensioner receives a preferential pension. It is assigned to metallurgists, oil workers, coal miners, ballerinas, trolleybus drivers, teachers - the lists of early retired pensioners are huge. The conduction of pension reform involved seeking resources within the system itself. To solve the problem of financing preferential pensions, a system of early non-state pension provision was created, implemented through non-state pension funds. However, the existing legislative regulation does not stimulate employers of hazardous and dangerous industries to create corporate pension programs due to the fact that they will not exempt employers from paying additional insurance premiums in favor of employees on preferential lists. As a result, there are no employers in the country who will not only pay wages on time, transfer insurance premiums in a timely manner, but for this category in an increased amount, but will also form additional contributions for the same employees under the early non-state pension system. The non-state pension paid in the frame of this system does not replace the early insurance old-age pension, that is, it does not entail a decrease in federal budget costs. The purpose of this study is to consider the main legal acts and the process of development of legislation on early non-state pension provision. The result of the study is practical proposals for improving the legal framework of the early retirement pension system.

scholarly journals State Administration of Retirement Age in the terms of Budget Crisis

Upravlenie ◽  
2016 ◽  
Vol 4 (3) ◽  
pp. 80-87
Author(s):  
Соловьев ◽  
A. Solovev
Keyword(s):  
Pension System ◽  
Demographic Factors ◽  
The State ◽  
Economic Consequences ◽  
Retirement Age ◽  
Pension Policy ◽  
State Budget ◽  
Methodological Approaches ◽  
State Pension ◽  
The Impact

The aim of the study is to analyze the effect of age on the appointment of the state pension fiscal system in our country. The problem of rising of the retirement age in Russia is given a value that is far away from the traditional context of direct influence of demographic processes on the level of pensions, on the one hand, and adaptation of the pension system to changing demographic factors, on the other. In the article the pension system for the first time is considered as a multifactorial model that corrects the degree of dependence on the mutually complex of macroeconomic and demographic factors in the different historical periods. This requires a fundamental change in the methodological approaches to the problem of rising the retirement age by using actuarial methods of forecasting. Actuarial analysis of the problem of retirement age in the work shows that the perception of the linear dependence of the age of the destination state of the demographic parameters cannot be considered as a tool for regulating the efficiency of the pension system. The results of the study are the specific parameters of actuarial assessments of the impact of demographic and macroeconomic conditions to increase the retirement age in Russia, conducted using data from the state statistics, formulated practical proposals to mitigate negative economic consequences. Conclusion: Rising the retirement age should be aimed at economic stimulation of formation of the pension rights of the insured in the long term, rather than the economy of the state budget. Methodological approaches, grounded in the work, and quantitative results of the actuarial calculations will be used in the formation of public pension policy in the preparation of the regulations to rise the retirement age, the pension formula of calculating the pension rights of insured persons, the mechanism of pension indexation.

Institution of Banking Pension Provisions: Preconditions, Nature, Competition with Traditional Institutions

2015 ◽  
Vol 2015 (2) ◽  
pp. 27-55
Author(s):  
Yuriy Ezrokh
Keyword(s):  
Financial Institutions ◽  
Pension Fund ◽  
Pension System ◽  
Pension Reform ◽  
Banking System ◽  
Pension Funds ◽  
Econometric Analysis ◽  
Traditional Institutions ◽  
State Pension ◽  
Pension Benefits

The article analyzes the pension reform implemented in Russia in 2013–2014, provides the modeling of possible pensions, determines the efficiency boundaries for the use of insurance and savings-insurance schemes offered by the Pension Fund of Russia. The author examines the activities and effectiveness in managing pension savings and reserves from non-state pension funds, especially the system of voluntary savings insurance. The study identifies the challenges faced by these financial institutions, which constrain the development of the Russian pension system. Drawing on logical and econometric analysis the author identifies the competitive opportunity for banks to participate in the Pension Benefits Act, calculates the proposals’ efficiency for future retirees and the banking system as a whole, determines the contribution of the proposed solutions to enhanced competition and more competitive banking environment.

Private Pension Funds in Hungary

2005 ◽  
Vol 55 (3) ◽  
pp. 287-315 ◽  
Author(s):  
Ichiro Iwasaki ◽  
Kazuko Sato
Keyword(s):  
Trade Unions ◽  
Pension System ◽  
Pension Reform ◽  
Legal Framework ◽  
Pension Funds ◽  
Negative Influence ◽  
Private Pension ◽  
Pension Scheme ◽  
Special Interest Groups ◽  
Governance Reform

The new pension system launched in Hungary in 1998 is epoch-making for having introduced a mandatory private pension scheme (MPPS). However, the political decision-making on pension reform and the scheme operations have been greatly influenced by conflicts of interests among ministries, political conflicts between parties, and the presence of special interest groups, including trade unions and financial institutions. This situation may have had a certain negative influence on the legal framework of the MPPS and on the management performance of private pension funds. In order for the MPPS to be sustainable in the future and to make insurance beneficiary profits a top priority, the corporate governance reform of pension funds and reinforcement of the monitoring system over them, and political neutralisation of the public pension system are necessary.

scholarly journals Contribution volatility and public pension reform

2017 ◽  
Vol 17 (4) ◽  
pp. 513-533 ◽  
Author(s):  
TRAVIS ST. CLAIR ◽  
JUAN PABLO MARTINEZ GUZMAN
Keyword(s):  
Local Governments ◽  
Pension System ◽  
Pension Reform ◽  
Pension Plans ◽  
Fiscal Sustainability ◽  
Economic Downturn ◽  
Defined Benefit ◽  
Defined Contribution ◽  
Unfunded Liabilities

AbstractIn the wake of the economic downturn of 2008–2009, researchers and policymakers have focused considerable attention on the extent of unfunded liabilities in US public sector pension plans and the implications for the long term fiscal sustainability of state and local governments. In response to the growth in liabilities, many states have introduced legislation that cuts back on defined benefit (DB) plan commitments, in some cases even shifting the pension system from a DB to a defined contribution or hybrid plan. This paper explores the factors that have led states to engage in pension reform, focusing particular attention on one factor that has only recently gained attention in the research literature: contribution volatility. While unfunded liabilities have significant long-term solvency implications, in the short term fluctuations in the amount of required contributions pose substantial difficulties for the ability of plan sponsors to balance budgets and engage in strategic planning. We begin by quantifying the volatility in the required contributions US states were expected to make between 2001 and 2013 and comparing the volatility of pension spending to other relevant tax and spending measures. Next, we describe the various types of pension reforms that states have implemented and examine the fiscal pressures facing those states that have engaged in reform. States with greater fluctuations in their required payments have been more likely to reduce benefits and increase employee contributions; they have also been more likely to institute these reforms sooner.

scholarly journals Informality and the Challenge of Pension Adequacy

2019 ◽  
Vol 19 (149) ◽  
pp. 1
Author(s):  
Christoph Freudenberg ◽  
Frederik Toscani
Keyword(s):  
Pension System ◽  
Pension Reform ◽  
Positive Impact ◽  
Defined Benefit ◽  
Defined Contribution ◽  
Real Rate ◽  
Labor Market Reform ◽  
The Impact ◽  
Term Labor ◽  
Pension Adequacy

Past reforms have put the Peruvian pension system on a largely fiscally sustainable path, but the system faces important challenges in providing adequate pension levels for a large share of the population. Using administrative microdata at the affiliate level, we project replacement rates in the defined benefit (DB) and defined contribution (DC) pillars over the next 30 years and simulate the impact of various reform scenarios on the average level and distribution of pensions. In the DB pillar, the regressive minimum contribution period should be re-thought, while in the DC pillar a broadening of the contribution base and/or an increase in contribution rates would help increase replacement rates relative to the baseline forecast of 25-33 percent. A higher net real rate of return than assumed in the baseline would also have a significant positive impact. In the medium-term, labor market reform to tackle informality, and a broad pension reform to restructure the system and avoid competition between the DB and DC pillars should be a priority. Given low pension coverage, having a strong non-contributory pillar will remain important for the foreseeable future.

scholarly journals Ukraine Pension System and Financial Markets: Conceptualization Problems

2011 ◽  
Author(s):  
Nataliya Rad
Keyword(s):  
Financial Market ◽  
Pension System ◽  
Pension Reform ◽  
Domestic Investment ◽  
Factors Analysis ◽  
Investment Resource ◽  
State Pension ◽  
Social Economic Development ◽  
Relationship Of ◽  
Market Infrastructure

The paper analyzes some aspects of Ukrainian pension system formation. All its three levels taken as a whole are a real source for the formation of domestic investment resources and implementation of their potential through financial market instruments. At the present stage relationship of these two institutes is pronounced in the frameworks of non-state pension funds. Implementation of the accumulative level of pension system has only to accelerate processes at work. Investigation is focused on the problems of integrating pension system investment resource into financial market infrastructure. It is noted that in the current conditions infrastructure of domestic financial market is being formed. Its instruments are developed and are functioning irregularly. However, there exist general problems that require their solution. They are related to insufficient operational capacity and efficiency of financial market regulating mechanism and other factors. Analysis of the quality of implementation of financial market basic macroeconomic function associated with redistribution of pension savings allowed us to make conclusion on the incompatibility of the achieved level of its development with the current needs adjusted for pension reform. Proposals for improvement of the concept of pension system and financial market along the lines of their harmonization and enhancement of the functioning efficiency in the context of social-economic development of Ukraine are worked out.

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