The World Bank Dictates to Ukraine How Its Pension System Should Operate

Translated by Ollie Richardson


Representatives of the World Bank consider that the introduction of funded pensions in Ukraine from January, 2019 “must be postponed”. Earlier a special-purpose committee in the Rada approved the introduction in Ukraine of an accumulative system of pensions.

This was stated during the presentation of the semi-annual economic forecast for Ukraine by the leading economist and the head of the World Bank in Ukraine’s program for Belarus, Moldova, and Ukraine Faruk Khan.

According to the representative of the international financial structure, the introduction of an accumulative system from January can negatively affect the current contributions.

Pension reform helped to increase the adequacy of providing and stabilising fiscal expenses. Additional initiatives in the sphere of providing pensions shouldn’t undermine the basic principles of the pension system. The introduction of an accumulative system from January, 2019, must be postponed, since it can negatively affect contributions to the present system and create additional fiscal obligations. In addition, the development of financial instruments isn’t enough,” stressed Faruk Khan.

The essence of an accumulative system is that a part of the obligatory contributions to the pension system of Ukraine must accumulate in the pension accounts of citizens who pay such contributions.

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