OREANDA-NEWS. April 12, 2011. During a television project "Conversation with the Country" by the President of Ukraine Victor Yanukovych was raised several issues on pension reform.

Appropriate steps to address them have been taken by the Government.
 
According to the solidarity system of pension insurance state guarantees the payment of pensions that is calculated by a formula that includes a number of years of seniority and salary at retirement and is financed by deductions from wages. So, today's retirees receive a pension from the contributions of today's workers.

Financial and economic crisis deepened the problems with filling the Pension Fund. In 2010 this deficit amounted to 26.6 billion. Without additional measures for its reduction in 2011 budget deficit of the Pension Fund according to various estimates could reach from 17 billion UAH to 22.6 billion UAH. Cover this deficit is provided by the state budget.

It should be noted that despite the difficult financial situation by Pension Fund provides pensions to increase by a factor of increase in average wages of regular workers in Ukraine last year - 1.04, which corresponds to 20% growth in average wages for full-time employee in 2010 compared to the year 2009.

Thus, there was a necessity to balance revenues and expenditures of the Pension Fund, to make structural changes in the solidarity system and intensify the work on pension reform, which should become an integrated component of economic transformation.

By the program of economic reforms Ukraine for 2010-2014 "Possessed society and competitive economy, effective state” is expected to implement the reform of pension insurance system in three stages.

The first stage (the end of 2010) decided in particular, to make organizational and preparatory work for implementation II funded pillar pensions.

The second stage (the end of 2012) will provide incentives to people beyond retirement age continue to work and increase the minimum term insurance period for retirement pension ,lift the unjust benefits of early retirement , to begin a gradual equalization of retirement age of women and men, the gradual redistribution of contribution rates for pension insurance from employer to employee. Also, at this stage it is intended to strengthen supervision of Accumulative Pension Fund to implement the state funded system of pension insurance and to introduce mandatory corporate pension scheme for financing early and special retirement benefits for certain categories that involving risk to life.

The third phase (the end of 2014) is planned for the economic stimulation of private pensions; establish joint investment programs; legislatively identify requirements to the various financial institutions for their involvement in the private pension system and more.

In the implementation of Program of reforms by the Government developed a draft Law of Ukraine "On measures to ensure the legislative reform of the pension system (registration number 7455 from 12.13.2010), which was considered February 16, 2011 at the parliamentary hearing: " The state pension reform and ways to improve" and now he worked in the Committees of the Verkhovna Rada of Ukraine taking into account suggestions and comments made during the discussion.

According to forecasts the implementation of this draft law will contribute in 2011 additional revenues to the pension fund amounting to 1.7 billion UAH.

In particular it is proposed:

- to set the maximum amount of pension at 12 living wages for people that lost productivity;

- to accomplish paying special pensions in the period of work in the amount established by Law of Ukraine "On Compulsory State Pension Insurance;

- to accomplish paying special pensions to persons who are eligible to retire early, only after reaching the normal retirement age;

- to increase the minimum insurance period required for a pension at the age of 5 to 15 years;

- to increase allowances for overtime, seniority and supplements subsistence level while increasing the living wage for working pensioners only after termination of employment;

- to raise the legal duration of insurance period for pension benefits in the minimum amount of 20 years for women and 25 years for men, respectively, 30 and 35 years for newly appointed pensions;

- provide that level of average wages, which accounted for the pension is determined for the three calendar years preceding the application for pension, retirement and re-made the average wage, from which pensions;

- to make re-calculation of pensions for working pensioners, who receive a service pension, only after reaching retirement age;

- gradually to raise the retirement age for women from 55 to 60 years, increasing it annually for 6 months for men who work in public service - up to 62 years from 2013.

Since January 1, 2011 were increased pension payments, amount of which is calculated based on the minimum subsistence level for those who unable to work because the amount of the approved living wage in I quarter 2011 in the amount of 750 UAH that more than 2.2 percent against December 2010.

By the end of 2011 indicated increasing pension payments will be due to the increased living wage for those who disabled with:

- April 1 (living wage will be 764 UAH. that the 1.9 percent increase in March 2011);

- October 1 (living wage will be 784 UAH. that at 2.6 percent over September 2011);

- December 1 (living wage will be 800 UAH., a 2 percent increase in November 2011).

In view with the abovementioned, the minimum pension in December 2011 increase to 39.6 percent if compare with December 2009.