#Commentary of Marina Zheynova on approving process of pension reform in Ukraine
According to official Ukrainian sources, the deficit of the Ukrainian Pension Fund is 145 billion hryvnia, or 6% of GDP. Naturally, this state of affairs in the IMF is considered unacceptable, so one of the conditions for granting the next tranche was the reform of the pension system.
The IMF’s fears are understandable. The main task is the current debt service and its return. In particular, in 2019 Ukraine has to return $ 7.5 billion. Elections are planned for this year, and it is still not clear how opponents will be able to take advantage of the state of affairs.
Thus, no matter how enchanting the presentation of the pension reform is, one thing is clear: the essence is reduced to the deficit of the Pension Fund and decreasing of the pensions’ level. And all is for the next tranche of the IMF.
What is significant, representatives of the IMF offered their assistance in developing the reform and submitted their proposals. But the Ukrainian leadership considers itself to be the titular nation and planet’s most intelligent inhabitants. After analyzing all the proposals of the IMF, Deputy Prime Minister Pavel Rozenko gave them his assessment and criticized the head of the mission Ron van Rooden: “After the words of the ‘expert’ that “the basic structure of the pension system has not changed,” any desire to read this whole nonsense to the end was lost,” Rosenko wrote. “Well, the maxim on the introduction of the second level – just “no comments”. A person just does not understand what it is and how it works. Terrible unprofessionalism!!!”.
What is the essence? Indeed, raising the retirement age for Ukrainians is not envisaged, but this is just another trick of the government, since they increase the minimum length of insurance period required to retire. By 2028, people with an insurance period of 35 years will be able to retire at 60 years old. Those who have insurance record of 25 to 35 years – at 63 years old, and finally, at 65 years old, those who have an insurance record of 15 to 25 years will be able to retire. At that, a missing insurance period (but not more than five years) a person can “buy” by paying contributions to the PF (about 1300 hryvnia per month, multiplied by a factor of 2 to 1.2, depending on the number of missing years). Five years of experience will cost about 84.5 thousand hryvnia approximately. If the period is less than 15 years, a person can claim only to receive social assistance.
It is suggested to reduce the length from 1.35 to 1, that is, if now, when retiring by age, the base is calculated approximately at the rate of 60% of wages, then with actual cancellation of the coefficient, the pension will be reduced by 35%. To put it simply, the official wage by 35% should be higher.
Also, it is proposed to abolish the right to early retirement for preferential categories, except military. We are talking about the introduction of the mechanisms of a funded insurance system.
There are also pluses – pensions will be “modernized”, they will abolish the discriminatory norm for 15% tax for working pensioners, that is, it will be possible to receive full wages and pensions. It is worth recalling that ex-Prime Minister Arseny Yatsenyuk introduced this tax for a year – apparently, they forgot to cancel it. Moreover, every year they promise to index pensions.
Prime Minister Vladimir Groisman promised that the reform will be implemented from October 1, otherwise he is ready to resign.
What is the result? Yet another mechanism of the genocide of its own people, because in the last 25 years, few people in Ukraine have been working officially. Unstable economic situation, inflation, just the need to survive was forcing people to work “in the shadows” or receive a minimum wage. Will there be a desire to live in Ukraine among citizens who have left to work abroad out of despair?
That’s the future in Ukrainian style – die before the age of 70, or live, but earn a meager allowance, if you’re lucky.
Ukrainians should know that the Poroshenko regime is absolutely not interested in a decent living standard for Ukrainian citizens. Under any pretext, the Ukrainian government will continue to worsen the welfare of the people and take away hard earned pensions, like they have already been done with the pensioners of the Donbass. When the power is criminal, both the fellow guys and the strangers get in the middle.
Unfortunately, we have to admit that the policy of genocide of the Ukrainian inhabitants is gaining momentum.
Marina Zheynova, the DPR People’s Council deputy