The Pension System of Ukraine: On Its Way to a Fundamental Reform

Author:Mykhailo Shumylo

Research focused on the sphere of the Ukrainian pension system is an important element of welfare research as a whole. Being an integral part of the economy, the pension system is subject to both positive and negative trends. The article examines legislative changes in the field of special pension, which are observed to be intensifying, and the introduction of an accumulative pension system is... (see full summary)

Mykhailo Shumylo
Doctor of Law, Senior Research Fellow
V.M. Koretsky Institute of State and Law
National Academy of Sciences of Ukraine
The Pension System of Ukraine:
On Its Way to a Fundamental
1. Introduction
Since the introduction of the rst pension laws, no country has achieved perfection, and if it has reached
high e ciency of the pension system, then over time that has still had to be modi ed in line with economic
requirements. The Ukrainian pension system was formed in the era of industrialisation, rapid population
growth, and the administrative-planned economy. Although it should be noted that until 1939, in the
territory of today’s western Ukraine, which was part of the Second Polish Republic, a very e ective and,
for the inter-war period, progressive pension system was functioning in Europe. The collapse of the Soviet
Union and the transition to a market economy, persistent economic and demographic crises, and political
instability (through which, among other things, pension reform became a hostage to political speculation
and the owering of social populism) led to the fact that in more than 25 years of independence of Ukraine,
an e ective pension system that would guarantee decent pensions to the citizens was not created. The
research presented here is an attempt to summarise the history and current state of pension reform in
contemporary Ukraine, and to point out vital issues that are being resolved and ones that still need to
be addressed. An important aspect of understanding the correctness or inappropriateness of the reforms’
direction is the conformity of newly valid legal acts to international standards in the social sphere.
2. The place of Ukraine’s pension provision
in the globalised world
Pension provision is one element of the economic system of Ukraine. The rights to pension are among the
key social rights de ned by the Constitution of Ukraine and the laws of Ukraine, rights that not only are pro-
claimed or declared but also are implemented in practice and a ect each person who is an active participant
in public life.
The supreme law of the land declares Ukraine to be a welfare state, and its second section clearly states
that citizens have the right to social security, which includes the right to be nancially supported in the
event of complete, partial, or temporary disability; widowhood; unemployment as a result of circumstances
beyond their control; old age; and other circumstances envisaged by law. This right is guaranteed via

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