The new minister invented a “pension reform”: what is the main danger?

The intentions of the new Minister of Social Policy, Denis Ulyutin, to carry out a “pension reform” are only a rebroadcast of the ideas of the People’s Deputy from the “Servant of the People” party, Galina Tretyakova, who represents the interests of insurance companies. In particular, we are talking about a mandatory accumulative system, which is unlikely to be effective in Ukraine.

This opinion was expressed on the air of “Pryamoy” by Andriy Reva, Minister of Social Policy (2016-2019).

“What Denys Ulyutin has just broadcast, in my opinion, are not his own ideas. Why? I know him very well. When he worked at the Ministry of Finance together with Danylyuk, I encountered him at work. He is a good professional person, if we are talking about finances. As for social protection, Mr. Denys has never dealt with these issues. Accordingly, he does not know either the pension system in depth or the social protection system… The pension system is an extremely serious and complex thing, so that you can start reforming it in a hundred days,” Reva noted.

According to him, in fact, the theses expressed by the new minister are the ideas of Galina Tretyakova, a people’s deputy from the “Servant of the People” party.

“Today, he continues the same line that his predecessors tried to follow, starting with Marina Lazebna and ending with Oksana Zholnovich. Sokolovska, who replaced me, was a little less influenced by Tretyakova. Well, these two, in principle, broadcast everything that Galina Nikolaevna wanted,” explains the former high-ranking official.

He particularly commented on the government’s initiative regarding a mandatory savings system, emphasizing that such an idea is unlikely to work in Ukraine.

“This is Galina Tretyakova’s fixed idea – a mandatory accumulative system. This is what she came into politics for in the first place. This is her ardent desire. When she came to social security, everyone thought that she was a specialist in the social security system. No. Galina Nikolaevna headed the pool of the largest insurance companies. And, in fact, this was their idea. But the insurance business has the same relationship to the pension system as a guinea pig to the sea,” Reva noted.

At the same time, he gave the example of Croatia, where they also tried to introduce a savings system, but after 20 years it had to be radically changed due to a lack of funds.

“She forgot to say that this only works in countries with a developed economy and a stock market. And if all this is not there, as in Ukraine, name me at least one company that has worked on the stock market for more than 20 years. The same, by the way, in Eastern Europe… And then, as in Croatia, when 20 years have passed and it is necessary to pay, it turned out that this money is not there. And now the state must compensate pensioners from the budget for everything that it took from them for 20 years,” says Reva.

“But Halyna Mykolayivna is not worried about what will happen in 20 years. These first 20 years, when they are trying to introduce a accumulative system, they will receive money, their insurance companies. And then, when it comes to paying, they will say: ‘Inflation ate it, mice ate it, we have something to do with it,’” emphasized former Minister of Social Policy Andriy Reva.

As a reminder, Minister of Social Policy, Family and Unity Denys Ulyutin presented a plan for the next 100 days, which, in particular, provides for “pension reform” . The official also stated his desire to change approaches to pension provision.

In particular, this concerns a solidarity pension system, guaranteed payments upon reaching old age, a direct link between SSC contributions, their duration and the amount of the pension, the transformation of special pensions into professional pensions, namely payment taking into account three factors: a basic payment, a variable pension component and a professional component from various sources of financing, as well as the introduction of a mandatory accumulation system.

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