13:29 12.10.2017

Funded pension system should be non-public, employees should pay contributions, not employers

2 min read
Funded pension system should be non-public, employees should pay contributions, not employers

Social Policy Minister of Ukraine Andriy Reva has said that the funded obligatory pension system should be non-public system and employees should pay contributions, but employers.

"The today's law says that the obligatory public pension system should be public. If the requirement is left, people who are to pay contributions are to be included in this public funded system. Many experts and lawmakers, and I personally believe that these should be non-public funds," Reva said at a roundtable in Kyiv on Thursday.

He said that the funded system should be obligatory, while citizens should select themselves non-public pension fund.

The minister said that the pay-as-you-go (PAYG) pension system is the issue of social provision, while the funded pension system is a financial issue, as the funds accumulated in it should be invested smartly.

"If these are non-public funds, the question who is to pay arouses. Today employers pay social security tax to the PAYG system. If we speak about funding, I think that there could be various thoughts – employees should pay from their salaries, as these are the funds that he is to accumulate," he said.

Reva said that this is his personal opinion and the final model of the funded pension system will be presented in the relevant bill.

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