Mar 27, 2015

Minister: Ukraine pension fund bankrupt

Ukraine’s Censor.net reports:

The Pension Fund is bankrupt, lacking 80 billion hryvnia for pensions – Social Policy Minister Rozenko

… The Minister of Social Policy of Ukraine, Pavlo Rozenko notes that the main resource to fill the budget of the Pension Fund today is by collecting taxes from the shadow economy.

He stated this in the program on Channel One, Censor.NET reports citing the Cabinet’s official website.

According to Pavlo Rozenko, the Pension Fund lacks 80 billion UAH for the payment of pensions in the existing amounts. “To put it bluntly – it (the Pension Fund – ed.) is bankrupt, and without help from the state the financial institution will simply cease to exist,” he said.

Pavlo Rozenko noted that due to the joint main position of the president and the government negotiation group, the key requirement of the IMF regarding balancing the budget of the Pension Fund by raising the retirement age to 65 years was avoided. “Negotiations with the IMF were very difficult, and the first version of the IMF memorandum demanded to increase the retirement age to 65 years, but thanks to our joint position we managed to move away from this key requirement,” the minister said.

“Will we have to come back to the issue of raising the retirement age, it depends on how quickly we will manage to end the shadow economy and how quickly this economy will provide resources. 200 billion UAH is paid annually in the shadow economy, for which no taxes are collected. Today the shadow economy is the primary resource available to the Pension Fund,” Rozenko said.