Pension system of Ukraine at the present stage: problems and the ways to solve them

Abstract

Purpose. The purpose of the article is to identify the main problems of the pension system of Ukraine, which have become extremely acute due to the russian-Ukrainian war, and to find ways to solve them.

Results. The article is devoted to the issue of the functioning of the pension system of Ukraine in the difficult conditions of military aggression. Financial insecurity in old age can lead to poverty, deprivation and other forms of social isolation. The concept of “pension system” is defined and its main elements are considered. The structure of the pension system of Ukraine is presented, which consists of three levels, although only two are functioning today. The shortcomings of the solidarity system and the reasons for its inability to ensure social justice are revealed. Among the main problems of domestic pension provision, the inadequacy of pension is highlighted, which is one of the main reasons that the standard of living of the elderly has significantly decreased, and the growing deficit of the Pension Fund of Ukraine.

Scientific novelty. In recent years, the pension system in Ukraine has been operating under conditions of maximum financial stress, not fully meeting the needs of pensioners. And since the full-scale invasion of the russian federation on the territory of Ukraine, the issue of the functioning of the pension system has not only intensified, but also acquired new features. It is determined that the main reasons for the decrease in income to the Pension Fund of Ukraine are the decrease in the number of working population as a result of military operations and the demographic aging of the population, and the decrease in income from the single social contribution by individual entrepreneurs. It is substantiated that the criteria for the effective functioning of pension systems are their adequacy, affordability, sustainability, equitability, predictability, robustness. A quantitative assessment of the effectiveness of the domestic pension system was carried out using the aggregate replacement ratio which turned out to be catastrophically low, which proves the inability of the current domestic pension insurance system to provide pensioners not only with a decent existence, but also puts them on the verge of survival.

Practical value. The principles of implementing the process of reforming the pension system of Ukraine have been determined. A possible solution to all the problems of pension provision in Ukraine at once is the completion of the pension reform, which began in 2003, as soon as possible, and the introduction of mandatory cumulative pension insurance and comprehensive support for the development of non-state pension provision, because participation in all three levels of the pension system will provide an opportunity for future retirees to diversify and multiply their retirement savings, and will also contribute to economic growth, because pension assets will be capitalized on the accounts of non-state pension funds and investment institutions.