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Peculiarities of Development of Non-State Pension Funds in Ukraine at the Current Stage of Pension Reform

Author

Listed:
  • Volodymyr Rudyk

    (Podilsky State Agrarian and Technical University, Kamianets-Podilskyi, Ukraine)

  • Svitlana Burdenyuk

    (Kamianets-Podilskyi College of Food Industry of the National University for Food Technologies, Kamianets-Podilskyi, Ukraine)

Abstract

Non-state pension provision forms the third level of the national pension system and represents funded pension programs on a voluntary basis. Since the state pension system does not fully satisfy the needs of citizens of retirement age, non-state pension provision plays an important role for the growth of incomes of Ukrainian pensioners. However, today non-state pension provision is not quite popular among the population. The purpose of the article is to assess the state of non-state pension funds in Ukraine, to reveal their features and development priorities at the current stage of the pension reform. The composition of financial institutions involved in the implementation of private pension provision was determined, and the relationship between them was disclosed. The peculiarities of the activities and responsibilities of private pension funds were highlighted. The analysis of the main performance indicators of non-state pension funds was carried out. It was revealed that the non-state pension system failed to attract a large number of participants. Most of the existing participants are workers whose pension plans are financed by their employers, and they usually do not pay much attention to their own pension accounts or to the performance of the non-state pension fund. Employers pay more than 90 % of the total accumulated pension contributions, and the rest are paid by employees and private entrepreneurs. The financial instruments available for investment in Ukraine severely limit the possibility of obtaining investment income and risk diversification. As a result, non-state pension funds invest mainly in two types of financial instruments: government securities and bank deposits. It was determined that an important direction in the development of non-state pension provision is to facilitate the involvement of more insurance companies and banks in this area. It is necessary to create favorable legislative and tax conditions for their cooperation within the framework of the non-state pension system.

Suggested Citation

  • Volodymyr Rudyk & Svitlana Burdenyuk, 2020. "Peculiarities of Development of Non-State Pension Funds in Ukraine at the Current Stage of Pension Reform," Oblik i finansi, Institute of Accounting and Finance, issue 1, pages 123-128, March.
    • Handle: RePEc:iaf:journl:y:2020:i:1:p:123-128
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    File URL: http://www.afj.org.ua/pdf/732-osoblivosti-rozvitku-nederzhavnogo-pensiynogo-zabezpechennya-v-ukraini-na-suchasnomu-etapi-provedennya-pensiynoi-reformi.pdf
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    File URL: http://www.afj.org.ua/en/article/732/
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    More about this item

    Keywords

    non-state pension provision; insurance organizations; custodian of pension assets; banking institutions; administrator of the pension fund; non-state pension funds;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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