Government of Ukraine approved bills on reforming pension system in compliance with European standards in pension provision

On Wednesday, April 29, at its session the Cabinet of Ministers of Ukraine approved a package of four bills that are designed to cardinally change the principles of functioning of the Ukrainian pension system.

The Ukrainian Government offers a new pension scheme for Ukrainian citizens, which determines that pensions shall be financed from three sources – solidarity, cumulative and non-public levels.

The existing solidarity system will be improved by abolishing inappropriate functions and elimination of special pensions from January 1, 2016. At this, a system of professional pensions for the categories of beneficiaries who really need it will be preserved.

According to the officials, the State guarantees to the citizens control over preserving and use of funds in the cumulative system. Under the aegis of the Pension Fund a special body will be established to deal with public administration of funds people have accumulated. In particular, the Council of the cumulative fund will engage companies on a competitive basis to manage the assets whose activities will be supervised by the authorities.

Prime Minister of Ukraine Arseniy Yatsenyuk noted that the draft law on the cumulative pension system would be submitted by the Government of Ukraine to the Verkhovna Rada as soon as possible.

Moreover, he added that the pension system establishes European standards in pension insurance and will become another factor to facilitate development of the Ukrainian economy: "These funds will be invested directly into the economy of Ukraine and new jobs."

The bills on the reform of the pension system were drafted by specialists of the Cabinet of Ministers following consultations with the public, national and foreign experts. The package of legislative initiatives was also agreed by members of the parliamentary coalition.