The increase of the minimum wage up to 3200 hryvnias should provide a weighty additional resource to fill the budget of the Pension Fund of Ukraine. Vice Prime Minister of Ukraine Pavlo Rozenko said in an interview with Uryadovy Courier.

According to him, the financial condition of the Pension Fund’s budget is mostly affected by two main factors: small wages of Ukrainians, from which they pay contributions, and the fact that many of our fellow citizens either work off the books, not paying contributions, or pay them not from the actual income, the larger part of which they get in envelopes.

"Therefore, the Government decision regarding the increase of minimum wage up to 3200 UAH per month is viewed as timely and crucial. This should give a significant additional resource to the budget of the Pension Fund. Hence, this year for the first time in 15 years we expect a significant reduction of its deficit", stressed the Vice Prime Minister.

At the same time, Pavlo Rozenko noted that within the limits of the single solidarity pension system it is impossible to significantly improve the lives of Ukrainians. "I mean the current and future retirees," he said.

"This explains why the current Ukrainian legislation provides for the introduction of a three tiered retirement scheme: pay-as-you-go (comprising 60%), contributory (30%) and non-state (10% - retirement insurance) components. And the problem of low pensions is that in fact only the pay-as-you-go component is in effect, so Ukrainians receive only 60% of what they would have got in case all three tiers had been working efficiently", said Pavlo Rozenko.