Pension Fund of Ukraine
The Pension Fund of Ukraine is a central executive body that manages a solidarity system of compulsory state pension provision, collects, accumulates and records insurance premiums, allocates pensions and prepares documents for their payment, provides timely and full financing and payment pensions, burial assistance and other social benefits. Legislative status According to the law, all pension payments are made from the Pension Fund of Ukraine. The Pension Fund of Ukraine monitors the target use of funds that go to payouts. The Pension Fund of Ukraine shall, in accordance with the established procedure, submit proposals to the Ministry of Labor and Social Policy of Ukraine on the issues of formation of the state pension policy and control the implementation of official legislative acts. Activities of the Pension Fund of Ukraine are subordinated and coordinated by the Cabinet of Ministers of Ukraine through the Ministry of Social Policy of Ukraine. Pension reform The implementation of pension reform proceeds through the gradual introduction of a three-tier pension system: The first tier is a Solidarity system The send tier is Mandatory Accumulation System The third tier is Voluntary Non-State Pension Savings System The main objectives of the pension reform are: to raise the living standards of pensioners; to establish the dependence of the size of pensions on the numbers such as earnings and length of service; to ensure the financial stability of the pension system; to encourage citizens to save money on old age; to create a more efficient and effective system of administrative management in pension provision. The three-tier pension system will allow the distribution of the three components of the risk associated with changes in the demographic situation (which is more sensitive to the solidarity system) and fluctuations in the economy and in the capital market (which is more experienced by the accumulation system). Such risk-republican sharing will make the pension system more financially balanced and sustainable, which will protect employees from lowering the total income after retirement. Chronology December 1990. The Ukrainian Republican Department of the Pension Fund was established. February 1991. The regional authorities of the Pension Fund have been formed. December 1991. The pensions were financed from the Pension Fund, and not from the state budget for the first time. January 1992. A Pension Fund of Ukraine was created. It was formed on the basis of the Ukrainian Republican branch of the Pension Fund of Ukraine. The administrations were established in the Autonomous Republic of Crimea, oblasts, cities of Kyiv and Sevastopol, approved the Pension Fund Regulations. The social insurance contribution rate was set at 61% of the wage fund. April 1992. The contribution rate for insurance of employer is reduced to 37% of individual salary October1992. The administrative liability has been introduced for non-payment of insurance premiums to the Pension Fund. July 1993. The basis for calculating contributions to the Pension Fund was arranged. December 1993. The Joint-Stock Post-Pension Bank Aval was created. Its aims were creation conditions for reducing the period of circulation of pension funds and