Cumulative pensions will help to unshadow the labor market, says Maryna Lazebna

The cumulative pension system will help to unshadow the labor market. This is the opinion expressed by Maryna Lazebna, Minister of Social Policy of Ukraine, during a public discussion on "Pension Savings: Myths and Reality" at the Ukrainian Crisis Media Center, organized by the Network for the Protection of National Interests "ANTS".

"Today we have a falling replacement rate - now it is 29%, some time it was 57%, and in the future, it will be less than 20%. That is, a person in the future, having a salary of 10,000 hryvnias, will receive a solidarity pension of no more than 2,000 hryvnias. We all need to be aware of this and talk about it honestly."

How can we change the situation? Raising taxes, the single social contribution, taking away resources for the payment of pensions from other social expenditures - apparently, this is not the way out. You can often hear: "Reduce the shadow economy, bring back migrants." The state has been doing this for 20 years and for 20 years no one has given people incentives for them to return and legalize. If we look at the experience of other countries, they have created incentives under which it is profitable to show all their wages – these are pension savings and health insurance.

Therefore, we assure that it is necessary to adopt a bill by the end of this year, which will introduce mandatory pension savings, so that next year we can prepare technically, and from January 1, 2022, to start making contributions.

None of the levels of the pension system alone will give people a decent life in old age. Therefore, it is important that the introduction of the second level helps to strengthen other levels of the pension system - solidarity and voluntary savings. To do this, the rules of operation must be the same for voluntary and compulsory accumulation, we must encourage competition and deprive of monopolies. Then a person makes a conscious choice, understands that pension savings are his/her property, which he/she manages, gets used to using savings according to uniform rules, develops voluntary savings, a person is interested in official salary, which increases income to the solidarity system."

Maryna Lazebna also stressed the need to ensure the protection of people's pension savings and reliable tools for investing pension funds in the economy.