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What Should We Wait From Pension Reform?

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The changes proposed by the government do not affect the basic problems of the pension system, says Volodymyr Dubrovsky.

The changes proposed by the government do not affect the basic problems of the pension system, says Volodymyr Dubrovsky: ‘Even if the revenues and expenditures of the Pension Fund are balanced at some stage, incentives to pay contributions there will be absent, as it was before. We have a problem with the pay-as-you-go system precisely because it is incapable of providing incentives in the context of a demography that we will have in the foreseeable future.’

According to Volodymyr Dubrovsky, ‘what is proposed is not a reform.’

‘Reform is changing relationships between people and incentives that people are guided by,’ the expert says. He adds the government had to decide on steps that are more radical and consider options for leaving the pay-as-you-go pension system.

July 7, 2017