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IMF puts forward demands for Ukraine to obtain next tranche
21:17, 16 September 2016
IMF puts forward demands for Ukraine to obtain next tranche

Ukraine will have to implement unpopular pension reform

21:17, 16 September 2016

Open source

Ukraine will have to carry out pension reform, optimize the system of payment of housing subsidies and develop a mechanism for increasing tariffs for gas and heating to get the next tranche of $ 1.3 billion from the International Fund for the EFF program. Apostrophe reports this with reference to the updated version of the memorandum of cooperation with the IMF.

"A significant part of the new requirements of the IMF is linked to pension reform. The Fund considers it necessary to consolidate the pension legislation, which now consists of twenty separate documents", reads the statement.

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Ukraine should adopt a law that would provide a gradual change in the retirement age by December 2016. The law should also provide a reduction reason for early retirement and the tightening of the bases for the minimum pension.

"Among other requirements are the establishment of a single principle pension without providing benefits for any professions (except military), broadening the base of contributions to the social security system, the establishment of an equitable tax regime for pensions, to ensure a closer link between pension contributions and the size of pensions, which should, in turn, stimulate the citizens to declare their real income ", reports the agency.

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The various categorical funding supplements to labor pensions will be transferred to the Pension Fund from the state budget. Ukraine will need to abolish the special pensions and create conditions for the introduction of a funded pension system (in addition to the existing one).

"Another requirement is the introduction a temporary mechanism for adjusting tariffs for gas and heating on a quarterly basis if the rates deviate from the level of full coverage of the cost of imported gas to 10% or more by the end of October", reads the statement.

As reported, the IMF allocated the third tranche of $ 1 billion to Ukraine. The decision was made on September 14. This decision to provide the tranche of financial assistance for Ukraine was adopted together with the exceptions to the general rules, given the current economic situation in the country.

Source: Apostrophe

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