EBA urges IMF and World Bank to support second level of pension insurance in Ukraine
The European Business Association (EBA) has appealed to the International Monetary Fund (IMF) and the directorate of the World Bank in Belarus, Moldova and Ukraine with the request to support the second level of pension insurance in Ukraine, which is proposed by bill No. 6677.
"The business supports the idea of financial defined contributions. The mechanism for its implementation is qualitatively explained in draft law No. 6677 ... The EBA urges the IMF and the World Bank to support this document. We hope that this will help launch the process of building the second level of pension insurance, stabilize the pension system in principle," the report says.
This bill has more than ten positive reports from domestic and international experts, and its provisions are in line with the directive of the European Parliament and the Council of the European Union, the EBA experts note.
The EBA also noted that there are about 12 million people of retirement age in Ukraine, the deficit of the Pension Fund exceeds UAH 200 million. Given the steady growth in the number of persons of retirement age, as well as the growing disparity in the ratio between the number of taxpayers and pensioners in the country, the experts of the association believe that the most convincing solution to the problem is the introduction of the second level of pension insurance from January 1, 2019.
"The system minimizes corruption risks, due to the diversification of public accumulations among tens of non-state pension funds. The state Pension Fund will be only an administrator of the funds, while they will be actually managed by non-state pension funds. And secondly, every citizen will have the opportunity to monitor the state of his savings on a daily basis, the correctness of profit accounting," the EBA said.