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Government's pension reform to eliminate leveling and to promote de-shadowing of the economy
09.06.2017 | 13:10
INFORMATION AND COMMUNICATION DEPARTMENT OF THE SECRETARIAT OF THE CMU

A pension reform offered by the Government, envisaging the modernizing of pensions since October 1 for 9 million retirees, the abolition of taxation of pensions for working pensioners and the resumption of justice for people with high seniority, aims to eliminate a leveling principle through which over 80% of pensioners have been obtaining the minimum pension, as well as to promote de-shadowing of economy through increased financial discipline. This was stated by Prime Minister of Ukraine Volodymyr Groysman during a meeting with representatives of regional media.

Describing the key pillars of the pension reform, the Prime Minister reiterated again that an issue of raising the retirement age is excluded. "We are not going to raise the pension age, we are restoring justice, explained Volodymyr Groysman. Pension means labour achievement, it shouldnt be treated as pecuniary aid. Which is why we assume that a person should have the minimum employment record, he was quoted as saying.

The Prime Minister explained that the threshold for assigning the minimum pension set at 25 years is considered a real figure. "Even if you were employed at 25, by the age of 50 you will have the required 25 years of service. And the retirement age will be 60", explained Volodymyr Groysman.

He accentuated it impossible to let the situation go as it is. "The fact is that the Pension Funds deficit is growing. It is now over UAH 140 billion it exceeds funding for education, science and culture as a total. It exceeds the defense budget. But the system is far from perfect. If we waste time, in 3-5 years the Pension Fund will become insolvent, said the Prime Minister. However, we have found a formula of how, avoiding an increase in the retirement age, to build a new model - the normal system. The pension reform shall annul leveling and shrink the shadow economy, and in a few years we will be able to eliminate the deficit of the Pension Fund", he explained.

In this regard, Volodymyr Groysman added that along with the introduction of pension changes, the Government will maintain the course towards strengthening economy of the country - through the launch of programs on support of industry, development of national product and opening up new markets for Ukrainian exports. According to him, the Government is currently developing a draft budget resolution planning further GDP growth in it.

"And speaking about the pension reform, I can tell that according to the preliminary agreement, the next week the President of Ukraine will summon a meeting of the National Council of Reform, during which we are to discuss the key pillars of the pension reform. Aftermath, we will go to the Parliament. However, our basic proposals have been already announced", summed up Volodymyr Groysman.

 

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