Expert reveals unexpected risks of the new pension reform in Ukraine.

Ukraine is preparing to implement an accumulative pension system, but experts express serious concerns about its effectiveness.

This was reported by a pension expert and journalist Serhiy Korobkin in his video review on November 11, 2024.

Pensions will almost double, the pension system will become more understandable, and indexation will be fairer. Such messages are fed to us almost every year almost every month. But in practice, nothing significant is happening.

According to current legislation, Ukraine should have a three-tier pension system in place: a solidarity system, an accumulative system, and a voluntary pension insurance system. However, only the first level is currently functioning, and partially the third.

The accumulative system involves directing a portion of insurance contributions not to the general budget, but to the individual's personal account. 'These funds should accumulate, accrue interest on them, and when the retirement age comes, they will gradually start paying them out as an additional pension,' explains the journalist.

Among the advantages of the system are transparent savings, the possibility of using funds in exceptional cases, and passing savings on to heirs. However, the expert warns of significant risks: 'It is necessary for the accumulated money not to be eaten up by inflation with time, not to devalue. And for this, they need to be invested somewhere to generate interest.'

The implementation of the system has been postponed since 2003. 'If it had started working right away in 2004, conclusions could have been drawn today about its effectiveness,' emphasizes Korobkin. Currently, the system's launch is planned for the years 2025-2026.