Funded pension system introduced in Ukraine

Source : 112 Ukraine

Old solidarity pension system, provided by state, is retained
15:06, 1 January 2017

112 Agency

Today the funded pension system is introduced in Ukraine. On January 1, comes into force the Law "On Compulsory State Pension Insurance", which introduced funded pension system. The old unfunded system is retained.

Accumulative Pension Fund - is atargeted budget fund, which receives contributions from  insured persons. Contributions will be send to pension savings accounts and invested in generate income in favor of the insured. Their assets will be used to pay life pensions or lump-sum payments of insurance contracts, and in some cases even to the members of clients' families or heirs.

The law specifies that the funded pension system is based on the principles of accumulation in the Accumulative fund or private pension funds. The new system is implemented for the people who are subject to obligatory state pension system and who on the date of transfer turned no more than 35 years. 

It is expected that by 2022 the percentage of contributions to the savings fund would be around 7%.

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