Funded pension system can be introduced via reallocation of costs between employer, employee and govt – World Bank

KYIV. Sept 13 (Interfax-Ukraine) – The funded pension system in Ukraine can be introduced through the redistribution of expenses between the employer, employee and the government without affecting the current receipts of the Pension Fund, World Bank Vice President for Europe and Central Asia Anna Bjerde has said.

The World Bank believes that the introduction of the funded component should not be carried out at the expense of current retirees or future taxpayers. Therefore, if a decision is made on further movement towards the introduction of funded pensions, there should be an open and transparent discussion in society regarding the financing of this new instrument, Bjerde said in interview with Interfax-Ukraine.

This could, for example, happen through some form of cost sharing among employers, employees and the government, without affecting the current receipts of the Pension Fund, she added.

Bjerde also said that there is another important task – the need to revise the expenses of the Pension Fund, which are actually carried out at the expense of state benefits and guarantees, but are not always part of pension obligations.

In fact, combining different cash payments and allowances, which are financed from the general budget, into a clear and universal program of basic pensions, complementing the basic insurance scheme, would largely solve the problem of the Pension Fund deficit, the World Bank vice president said.