FORMATION OF FINANCIALLY STABLE PENSION SYSTEM IN UKRAINE: CHALLENGES, PREREQUISITES, CRITERIA, MEASURES

Authors

  • O. Vovchak Banking University
  • L. Нalkiv Lviv Polytechnic National University
  • T. Kulinich Lviv Polytechnic National University
  • I. Zhayvoronok Lviv Polytechnic National University

DOI:

https://doi.org/10.18371/fcaptp.v4i35.222411

Keywords:

pension system, financial stability, Pension fund of Ukraine, budget

Abstract

This paper identifies the main tasks for solving the problem of creating an effective pension system in Ukraine. The macroeconomic, social-labor and demographic factors of development of the pension system of Ukraine are considered.

Based on the operating consolidated budget data of the Pension Fund of Ukraine, it is proven a financial imbalance, which is covered by subsidies from the state budget.

A critical analysis of the dynamics of the Pension Fund of Ukraine revenues and expenditures has been carried out.

Based on the statistics of the Cabinet of Ministers and the Pension Fund of Ukraine, the growth rates of the average wage, the average pension, the number of pension tax payers and the number of pensioners have been calculated. The advantages and disadvantages of the increase in the indicators of the balance of the pension system are characterized.

The example that confirms the unfairness of the approach to the calculation of pension payments to workers and self-employed individuals is presented.

The main criteria for the effectiveness of the pension system are identified. The parameters for assessing the effectiveness of the pension system are described.

A set of measures has been formed to improve the current Ukrainian pension system.

The necessary value of the replacement coefficient to reach the average level of European countries is determined.

The restrictions to which the regulatory documents that will form the basis of the strategy of long-term development of the pension system of Ukraine are listed.

The conditions that should be formulated to ensure the balance and long-term financial stability of the pension system are proposed.

The integration of the pension system into other institutions of public administration and their interdependence on the example of the budget of the Pension Fund of Ukraine have been proved, a considerable part of which is formed on the basis of budget transfers.

Overall, there are outlined significant institutional changes required by the functioning of financially stable pension system. The main attention is paid to the introduction of a fully functioning three-tier pension system.

Initial changes have been proposed to approaches to the accrual of pensions, which must meet European standards and take into account the valorisation of income.

Author Biographies

O. Vovchak, Banking University

Doctor of Economics, Professor

L. Нalkiv, Lviv Polytechnic National University

Doctor of Economics, Professor

T. Kulinich, Lviv Polytechnic National University

Ph. D. in Economics, Associate Professor

I. Zhayvoronok, Lviv Polytechnic National University

Specialist of Department of Organizational Management

References

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Published

2020-12-24

Issue

Section

Economic-theoretical aspect of Financial Credit System's development