STATE AND PROSPECTS OF UKRAINE'S PENSION SYSTEM REFORM

Анотація

Introduction. At the present stage of social and economic development, distributive pension systems operating in most countries of the world are ineffective because they cannot withstand the negative impact of demographic factors, namely aging of the world's population. In Ukraine, at present, the relatively high level of population aging is combined with large-scale depopulation, which leads to considerable difficulties in the field of social protection of the elderly. The foregoing requires the restructuring of the existing socio-economic system in line with the needs of the aging population, the reform of the social protection system, health care.

Purpose. The purpose of the study is to analyze the current state of the Ukrainian pension system, identify its problems and provide recommendations for its improvement.

Methods. Methods used in the article: deduction, induction, scientific abstraction.

Results. In Ukraine, there is a process of reducing the population, including pensioners, due to a number of negative factors: low fertility, high mortality, low living standards, insufficiently effective system of medical care. The share of pensioners, for the analyzed period, reached the point of more or less 30%. The ratio of the retirement burden varied within the range of 0.41-0.46.

The replacement rate of earnings by pensions had been steadily declining from 49% in 2013 to 24.9% in 2017, due to the fact that the growth of the average pension significantly lagged behind the growth of the average salary throughout the country. This situation has led to a significant deterioration in the standard of living of pensioners and the inability to meet their needs at their usual level.

The ratio of minimum and average pensions increased from 0.65 in 2013 to 0.79 in 2017, indicating a leveling of labor input and earnings in the active period of working life and a gradual equalization of pensions for all the unemployable. The analysis of the Pension Fund's activities in Ukraine has shown that Ukraine's pension system is in a state of crisis, characterized by such manifestations at the macro level: a significant deficit of the Pension Fund, which leads to increased dependence on the state budget; reduction of own revenues of the pension fund.

Originality. As a result of the study, it was determined that the successful implementation of the pension reform in Ukraine, in particular, the development of non-state pension provision, will have the following positive consequences: 1. It will allow to raise the level of retirement benefits for the elderly. 2. It will facilitate the development of the stock market of Ukraine. 3. It will promote the development of insurance business. The development of non-state pension funds will result in a significant increase in the demand for life insurance, life annuity pension, a life-time pension, and a retirement pension for spouses. 4. It will lead to a decrease in the size of the shadow economy. 5. It will reduce dependence on external borrowing and form an additional source of long-term lending to the domestic economy, as non-state pension funds are invested in the long-term.

Conclusion. Despite continuous attempts to improve the pension system, unfortunately, it still remains ineffective in all aspects. It aggravates the state budget of the country and is socially unfair. The main directions of further improvement of the pension system of Ukraine should be: substantial improvement of the solidarity pension system and creation of favorable economic conditions for the development of the accumulation component of pension provision. Pension reform should be carried out in a comprehensive manner with other reforms, by raising the general welfare of the population, establishing reliable financial institutions for non-state pension provision, and forming an understanding of the population's need to actively participate in cumulative pension provision.