Abstract
The financial situation of the Ukrainian pension system and the problems of its reforming play an important role in determining the general standard of living in the country. The institutional weaknesses in the financial management of the state pension system have led to an unbalanced budget of the Pension Fund of Ukraine and a low standard of living for pensioners. In order to identify the potential for building an effective system of pension insurance, it is necessary to study the modern aspects of financial provision of the Ukrainian pension system. The article defines the economic interrelations between the processes of forming the financial resources of the Pension Fund of Ukraine and the volume and structure of the gross domestic product. In view of this, the financial sustainability of the state pension system of Ukraine has been researched and the determinants of its stable functioning in the years 1999–2017 have been identified, which enables to influence the process of effective formation and use of pension resources and to identify the strategic directions of reforming the pension system.
Highlights
Pension provision is largely able to provide social protection of citizens and support for social stability of the society
This, in turn, requires qualitatively new approaches to the study of pension sustainability, which is characterized by the accumulation of pension funds in the state budget and in the budget of the state trust fund at the expense of taxes, insurance premiums and other revenues, as well as transfers from the state budget
Tyshchenko and Tomin (2009) investigated so- While paying tribute to the scientific achievements cial and legal aspects of the pension reform im- of the issues identified, an important task in this plementation in Ukraine and the EU countries; context is to clarify the financial determinants of Tolubiak (2011) substantiated the functioning of the sustainable functioning of the pension system the financial mechanisms of pension provision; in order to prepare the ground for determining Omelianovych (2012) disclosed topical issues of the priorities for its development. reforming the pension system of Ukraine and its impact on socio-economic development of society
Summary
Pension provision is largely able to provide social protection of citizens and support for social stability of the society. Buiter and Grafe (2004) considered the importance of sustainability based on a “permanent balance rule”, according to which the growth of deficit is possible with the increase of transfer payments, state consumption and gross capital accumulation, which exceeds the expected average level in the future. There are no clearly defined areas of strategic management of the Pension Fund’s revenues. This is due to insufficiency of the financial provision of the pension system and its inability to fully fulfill the main function of social justice. It is impossible to solve this problem without the diagnosis of the formation of revenues and expenditures of the Pension Fund of Ukraine and identifying the main determinants ensuring its stable functioning
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