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Administrative Expenditures Of Social Security Funds In Ukraine

Author

Listed:
  • Nataliia Ivanchuk

    (Department of Finance, Accounting and Audit, National University of Ostroh Academy, Ukraine)

  • Yulia Kharchuk

    (Department of Finance, Accounting and Audit, National University of Ostroh Academy, Ukraine)

Abstract

Along with the expenditures for social protection, social security funds finance administrative direction, which should correspond to the amount of functions performed by a particular fund. The purpose of the paper is to determine ways to reduce administrative expenditures of state social security funds in the conditions of reforming Ukrainian economy. For this purpose, the authors investigate distribution of the expenditures between social security funds, analyse dynamics and structure of assignments for fund administration, and suggest possible ways to rationalize maintenance cost for these institutions. Methodology. Administrative expenditures are an integral part of the cost of social security funds and include particular items of expenses in the budget of these institutions. Applying a systematic approach to calculating the administrative costs of social security funds of Ukraine the authors have taken into account the expenditures related to funding management, support for information systems, and organization of work with insured people. Results of the survey showed that in 2007-2016 Pension Fund of Ukraine incurred the largest part of social expenditures (more than 90%) compared with other social insurance funds (less than 10%). At the same time, the administrative expenses were divided approximately into two halves between Pension Fund and other social security funds. In 2015, the government launched a reform of social insurance funds that aimed to reduce funds to three institutions but a decrease in the total amount of administrative expenditures has not been achieved yet. In addition, Pension Fund of Ukraine was least burdened with administrative expenses, while other social security funds with a relatively small share of social expenditures were burdened with administrative expenditures much more. Practical implications. Research showed that nowadays the existence of several social security funds in Ukraine is economically inexpedient and it is essential to concentrate functions of social protection in one institution. In particular, it may be appropriate to keep Pension Fund, which should concentrate all current social functions of social security funds naming it Single Social Fund of Ukraine. Value/originality. The assessment of administrative expenditures of social security funds in Ukraine is a systematic survey that allows making a comprehensive analysis of expenditures for the maintenance of mentioned institutions compared with the volume of functions assigned to these establishments.

Suggested Citation

  • Nataliia Ivanchuk & Yulia Kharchuk, 2017. "Administrative Expenditures Of Social Security Funds In Ukraine," Baltic Journal of Economic Studies, Publishing house "Baltija Publishing", vol. 3(5).
  • Handle: RePEc:bal:journl:2256-0742:2017:3:5:23
    DOI: 10.30525/2256-0742/2017-3-5-157-161
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    Cited by:

    1. Kozlov Dmytro & Derev’yanko Yuriy & Piven Vladyslav & Melnyk Leonid & Kubatko Oleksandr, 2021. "The Financial State of Local Communities: A Comparative Research of Ukraine and the Czech Republic," Economics and Business, Sciendo, vol. 35(1), pages 165-173, January.

    More about this item

    Keywords

    social security funds; administrative expenditures; merger of social security funds; Pension Fund of Ukraine; Disability Insurance Fund of Ukraine; Unemployment Insurance Fund of Ukraine; Accident Insurance Fund of Ukraine; Social Security Fund of Ukraine;
    All these keywords.

    JEL classification:

    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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