The increase of the
minimum wage up to 3200 hryvnias should provide a
weighty additional resource to fill the budget of the Pension Fund of Ukraine. Vice
Prime Minister of Ukraine Pavlo Rozenko said in an interview
with Uryadovy Courier.
According to him,
the financial condition of the Pension Fund’s budget is mostly affected by two
main factors: small wages of Ukrainians, from which they pay contributions, and
the fact that many of our fellow citizens either work off the books, not paying
contributions, or pay them not from the actual income, the larger part of which
they get in envelopes.
Government decision regarding the increase of minimum wage up to 3200 UAH per
month is viewed as timely and crucial. This should give a significant
additional resource to the budget of the Pension Fund. Hence, this year for the
first time in 15 years we expect a significant reduction of its deficit", stressed
the Vice Prime Minister.
At the same time,
Pavlo Rozenko noted that within the limits of the
single solidarity pension system it is impossible to significantly improve the
lives of Ukrainians. "I mean the current and future retirees," he
"This explains why the current Ukrainian
legislation provides for the introduction of a three tiered retirement scheme: pay-as-you-go
(comprising 60%), contributory (30%) and non-state (10% - retirement insurance)
components. And the problem of low pensions is that in fact only the pay-as-you-go
component is in effect, so Ukrainians receive only 60% of what they would have
got in case all three tiers had been working efficiently", said Pavlo Rozenko.