Current state of pension reform in Ukraine

Abstract

The current phase of Ukraine’s development characterizes by a complex of external and internal challenges, which provoked a deep economic crisis in the country, led to a serious deterioration of the living standards, exacerbated social tension. The way to overcome the economic crisis lies in the implementation of complex long-term economic reforms that require the support of the entire society based on national cohesion, unity and trust to the government. In this context, reliable social protection of the population is becoming one of the main factors of national security in Ukraine. This requires the government to rethink the fundamentals, ideology, strategy and tactics of financial policy in the field of social risk management as well as cardinal practical steps to increase the role and significance of the basic institution of social protection of the able-bodied population in market economy countries - the social insurance system. The balance of the state social insurance system depends on the financial equilibrium of the Pension Fund of Ukraine, which concentrates about 90% of its financial resources. The path to such an equilibrium lies in the transition to a three-pillar pension system. However, this is possible only if our country achieves economic stability. Premature forced state compulsory accumulative insurance (second pillar of the pension system) under the crisis conditions will create a threat of social tension aggravation. Thus, under current economic conditions, the introduction of the second pillar of the pension system, although it is an objective necessity, requires clear economic preconditions, the main are: restoration of GDP growth based on overcoming the crisis in the real sector of the economy; the hryvnia exchange rate stabilization; growth of the average monthly wage in the country etc. Actuality, practical significance as well as insufficient elaboration of this problem caused the choice of the topic of the article, determined its purpose, task, logic and content.