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Pension Fund gap to grow dramatically unless reform adopted, warns Groysman

After 3–4 years, the Pension Fund willbe unable to pay pensions.

Pension Fund gap to grow dramatically unless reform adopted, warns Groysman

Prime Minister Volodymyr Groysman expects that the deficit of the Pension Fund in 2018 will increase by 34bn to 175bn hryvnia, unless pension reform is adopted. "The deficit of the Pension Fund this year is at 141bn hryvnia this year... With this unfair and imperfect pension system, the deficit of the Pension Fund will only grow, and unless the problem is addressed, this deficit will grow to 175bn hryvnia next year, and to 200 by the year 2019," the prime minister said during the government hour in the Verkhovna Rada on Friday, 19 May.

In this situation, the Pension Fund will be unable to pay even current-size pensions.

Meanwhile, the parliament's adoption of the government's draft reform will allow reining in the deficit at about 145bn hryvnia, Groysman added, and expect the Pension Fund revenues to start growing in 2019.

Previously, the prime minister predicted a non-deficit Pension Fund by 2024.

On May 17, the Cabinet of Ministers approved draft legislation on pension reform. The draft reform provides that in 2018 the minimum insurance period for retirement by age will be raised to 25 years, and will be annually increased by one year and to reach 35 years by 2028.

It is planned to introduce a single approach for calculating pensions for pensioners using the average salary at UAH 3,764.4 (currently, depending on the year of the pension, from UAH 1,197.91 to UAH 3,764.4).