Recent Ukrainian Pension Reform Overview

Ukraine has been trying to reform its crawling pension system in order to support its retired citizens with sufficient pension welfare and to attract pension charges into the development of its economy. At present, the pension system includes Level 1, where retired Ukrainians receive a pension on a solidarity basis depending upon length of service and amount of salary; and Level 3, where employees make voluntary payments to non-state pension funds. The system is fully missing Level 2, where employees/employers make mandatory payments to state or non-state pension funds.

According to recent data of the Ministry of Social Policy of Ukraine, the total value of pension assets accumulated on Level 3 is only UAH 2 billion (approximately €61 million) and half of this amount is held alone by the corporate non-state pension fund of the National Bank of Ukraine. Meaningless development of Level 3 confirms that Ukrainians do not put much confidence in private institutions and