Oleksandr Klymenko Official website
Articles | 1201 | 13.02.2017

The power will reduce the amount of pensioners by three times

What does a tax in retirement mean? When to get retired? What is the “pension reform”?

These are the most frequently asked questions that I have received by e-mail for the last days.

I would like to briefly describe, what is going on from the very beginning.

Current government will sign a new memorandum for the sake of another IMF loan. One of the key points, which will be fixed in it, is the pension reform.

Nowadays, it is not clear exactly, which are the onerous terms presented in the document. Moreover, no one will know about it until the last moment. Nowadays, the power is making cunning moves, speaks of a decent pension, hiding the real plans. If they state it publicly, there will be a social explosion.

For the same reason we will not be able to see the clear provision:  retirement age will be increased by some age. It will be other way round.

First of all, documents will be signed, after that – the Verkhovna Rada will make fatal decisions at night.

It will happen by the end of April. Since January 1, 2018, the pension reform will come into force.

As a result, Ukrainians will get retired later. In fact, retirement age will not be increased. BUT! In order to receive even the minimum pension, pensionable service will be increased by 35 years. Such a fraud.

It means that Ukrainians will be forced to work up to 65-67 years. In fact, it is almost to death – the average life expectancy in our country is 71 years.

Thanks to this reform, the government is expecting for saving on pensioners at least 3% of GDP.

3% of GDP – is UAH 77.6 billion, or the annual amount of pension for one-third of retirees (namely, for 5,185,779 pensioners). The reform will lead to a drastic reduction of the one-third of pensioners – that’s the aim of the power.

In addition, workers, who are working with hazardous substances, were not deprived of attention of the government. Such Ukrainians get retired earlier.

Moreover, the power offers to introduce an additional social insurance contributions tax (tax in retirement itself). It will be paid by the employer and accumulated on personal account. If an employee retires before term, payment of preferential pensions will be funded by this account.

However, we are well aware of the fact that even if the money is not spent on the primary needs (namely, stolen), a few years later these funds will turn into a penny due to inflation.

In addition, the government takes an obligation to expand the tax base for contribution to the State Social Security Fund. Thus, not only entrepreneurs with zero income will pay Single Social Contribution.

I believe that it is important to save a socially oriented pension system in current situation. It comes about retaining the retirement age for men and women at level of 60 years. Pensionable service, which gives the right to receive the minimum old-age pension, should be at the level of 15 years.

We do not need the IMF loans at the price, which Poroshenko, Groysman and others are ready to pay for.

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