Funded pension in Ukraine: Smigel called the timing

Накопительная пенсия в Украине: Шмыгаль назвал сроки

From January 1, 2021 Ukraine may receive a contributory pension. At least, such terms do not exclude the government. This was stated by Prime-Minister Denis Shmyhal, writes “Interfax-Ukraine”.

According to him, the introduction of a funded pension is inevitable for Ukraine because of the demographic situation, because today, little children and a lot of people in the productive age. After 15 years, it may happen that one employee will have two pensioners.

He also called funded system, the only way for future retirees to get a decent pension, and for a business to maintain an adequate load.

We are now preparing the bills. Don’t want to sound too optimistic, but by January 1, 2021’s (contributory retirement pensions – ed.) it is realistic to impose.

He also said that one of the options on pension there will be 2% of the current ERU and 2% of the tax to incomes of physical persons.

The 4% guarantee in today’s prices in retirement to 1 million hryvnia.

It is planned three options – a one-time payment of the entire amount of the accumulated pension, installment payments for 5-10 years or life annuity with a fixed amount.

We will note, today in Ukraine there is the solidarity of the state pension system. In simple words, under this system, the working generation pays for those already retired.

For funded schemes the man himself saves himself not retired, still working, making deductions from wages. These funds before retirement can be invested and generate income.