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Economy 2020-06-15T07:05:55+03:00
Ukrainian news
Ukraine Commits Before IMF By 2017 To Adopt Law On Gradual Change Of Retirement Age

Ukraine Commits Before IMF By 2017 To Adopt Law On Gradual Change Of Retirement Age

IMF, Ukraine, law, cooperation, memorandum, retirement age, pension

Ukraine has committed before the International Monetary Fund (IMF) before the end of 2016 to adopt a law on a gradual change of the retirement age.

Ukrainian News Agency learned this from the Ukraine – IMF Memorandum of Cooperation.

“Pension reform. Demographic trends and the sharp reduction in the social security contribution rate are set to widen the pension fund’s structural deficit considerably in the coming years, demanding significant transfers from the state budget. To address these challenges in a sustainable manner, we are committed to pursue a multi-phased reform strategy,” it reads

Ukraine already implemented the first phase of reforms in 2015 by eliminating special pensions for civil servants and other privileged groups, and by increasing the retirement age and the qualified period of service for a number of professions eligible for early retirement.

To reduce the very high pension fund deficit that threatens the viability of the pay-as-you go system and to improve its fairness and ability to provide adequate pensions over time, Ukraine will, by end-December 2016, adopt legislation gradually adjust the statutory retirement age and further reduce the scope for early retirement; tighten the eligibility criteria for the minimum pension; consolidate pension legislation, which is now spread across about two dozen laws, and ensure a single principle for providing pensions without privileges for any occupation (with the exception of the military); expand the base for social security contributions; ensure equitable tax treatment of pensions; and better link benefits to contributions, also to encourage the declaration of actual incomes.

In addition, Ukraine will separate various categorical pension supplements from the labor pensions, bring their financing from the pension fund to the state budget and improve their targeting starting from 2017 to make the system more equitable and free up resources for more efficient poverty alleviation.

As Ukrainian News Agency earlier reported, the Cabinet of Ministers has proposed that the Verkhovna Rada assign UAH 156.2 billion for the Pension Fund in 2017.

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