Ruslan Magomedov: Ukraine lacks financial instruments for the placement of pension contributions

Ruslan Magomedov, Chairman of the NSSMC, took part in a round table on “Pension reform in Ukraine: to be or not to be”, which was held on September 22, 2021.

Mr. Magomedov noted: We see problems with the financial instruments at the second level, where the funds of pension system will be placed. For example, today the third level of pension provision has been operating in Ukraine for a long time. Unfortunately, we see that near 70% of the funds are invested in bonds of internal state loans. On the one hand, it is very good, because it provides a resource for the country’s economy, and on the other hand, it prevents the variability of these contributions. The NSSMC is working on the conditions for the creation of financial instruments. And then domestic investors will be able to get quality mechanisms for investment of funds”.

The participants of the event also provided answers to the following questions: what kind of pension system does the country’s leadership offer? Its advantages and disadvantages, what prevents a full-fledged pension reform in Ukraine? what pension will today’s 40-year-olds receive? what pension system does society support? What explanatory work should be done to have the support of Ukrainians in reforming the pension system?

Answering the questions of the moderator of the event, the Chairman of the NSSMC noted: “Why do our citizens evade paying SSCs today? Because they do not link this contribution to their future wealth. Our task at the second level of pension provision is to show Ukrainians the figures which they have accumulated over a certain period of payment of such contributions. Then everyone will be able to understand and see the result of paying SSCs. Because today most people consider these expenses inappropriate and try to avoid them by any means”.

The speakers at the event were: Serhiy Marchenko, Minister of Finance of Ukraine, Maryna Lazebna, Minister of Social Policy of Ukraine, Vitaliy Lomakovych, Advisor to the Minister of Finance and founder of GROWFORD Institute.

The organizers of the round table are Growford Institute and Gorshenin Institute with the support of the Internet portal LB.ua.