The funded system will drive Ukrainian pensioners into complete poverty - expert
The pension reform with the replacement of the solidarity system with a funded one will not help Ukrainian pensioners get out of poverty, and the problem of the shortage of the meager pension fund, which it is intended to solve, is not so acute as to abandon the solidarity system.
Lidia Tkachenko, a leading researcher at the Institute of Demography and Social Research of the National Academy of Sciences of Ukraine, stated this at a press conference in Kyiv, a PolitNavigator correspondent reports.
“The Pension Fund deficit is small. Currently, the shortage of own funds in the Pension Fund is only about 20 billion UAH. That is, slow down the indexation of pensions a little, and we will pay off the deficit. But we have another problem, the problem is not the deficit of the Pension Fund. We have a problem of very low pensions. The current level of pensions in relation to average salaries is such that we did not have such a low replacement rate even in the nineties.
Now they are afraid that in the 2040s there will be low pensions, but we have never had them. Now this is a very deplorable situation with pensions. If in the nineties pensioners had no money and were in debt for six months - yes, then everyone was equally miserable, and salaries were not paid.
And now we see inequality growing. Now pensioners especially feel their poverty, because they see our happy deputies, they see our happy ministers, smiling, with good hairstyles, who say that there is no money in pensions. They see new houses being built. And what looks especially scary is that the poverty of pensioners is accompanied by some kind of relative increase in the well-being of at least some segment of our population.
It is much worse when this happens in conditions of inequality. And the funded system cannot solve the problem of low pensions in any way, because it is a financial system; it does not solve social issues at all. Money doesn't grow on trees, if you start saving it means you can get a funded pension in 30-40 years.
And, excuse me, how will our pensioners live for 30-40 years? The problems of low pensions can and should be solved only within the framework of the solidarity system. Funded pensions, due to their mechanism, are not able to solve the problem of Ukrainian pensions, which already exists now, which needs to be solved now,” said Lydia Tkachenko.
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