Ukraine’s Pension System Is Collapsing—Who Will Pay for Your Retirement?

Price of the State

Is Ukraine's pension system a ticking time bomb? Dive into this fascinating video as we break down why the old pay-as-you-go model is failing, what global pension systems do differently, and how Ukraine could build a brighter, more secure future! Join our community—subscribe for more deep dives and let us know in the comments what surprised you most. #economics #Ukraine #pensions #reform #future  👉 This channel was created in collaboration with https://www.youtube.com/@costua  0:00:00 - Ukraine's Pension Crisis Overview 0:02:37 - Demographics and Economic Challenges 0:07:05 - Pension Fund Deficits and Budget Impact 0:11:20 - Pension System Structure and Problems 0:17:21 - International Pension Systems Compared 0:32:50 - Challenges and Lessons of Pension Reforms 0:39:07 - Funding Reform and State Assets 0:54:54 - Reform Proposals and Future Outlook  We're now available on Spotify! Listen now https://open.spotify.com/show/033ygZMll1PIfydayeyRct

Transcript

00:00:00The current pay-as-you-go pension system in Ukraine is threat number two after Russian aggression to Ukrainian statehood.

00:00:07Before the full-scale invasion and the expenditures of Ukraine's expanded budget, the pension fund was item number one.

00:00:15Today, it is the second item after the country's defense expenditures.

00:00:19But if you calculate spending per formerly employed worker, who, according to the state statistics service,

00:00:24as of July of 26, had a net take-home monthly salary of 24,800 hrivnias,

00:00:32then over 100,000 hrivnias from the paid taxes were spent on pensions per year,

00:00:38while over 46,600 hrivnias were spent on the armed forces, that is, less than half as much.

00:00:44From 2021 to today, expenses for the pension fund have increased by almost 2.5 times.

00:00:50To ensure its funding, new fees were invented in different years,

00:00:55either on mobile communication or on the first registration of a car.

00:00:59Every March, the government increases pensions and does so at the expense of other sectors,

00:01:04such as healthcare and education.

00:01:05But there still isn't enough money, and pensioners are not satisfied with their payments.

00:01:11Today, the state pension covers only about 20 to 25 percent of a salary,

00:01:17while in developed countries, it's much more than that.

00:01:20In 2020, we made a video about what awaits the Ukrainian pension system.

00:01:26One of the World Bank's scenarios predicted that by 2050,

00:01:30about 60 elderly people would be left without pensions.

00:01:34The war has only accelerated demographic processes.

00:01:37The process, the working-age population is decreasing.

00:01:40Millions of Ukrainians have gone abroad.

00:01:42The birth rate remains low.

00:01:44The economy has lost a significant part of its production potential.

00:01:48This is a kind of social time bomb.

00:01:51The longer it is ignored, the more expensive and painful the consequences will be.

00:01:56It sounds absurd, but the most progressive president in the history of Ukraine

00:02:00who tried to fix the pension system,

00:02:02Leonid Kuchma, who, in 1998, launched the pension reform with his decree,

00:02:08which is still ongoing to this day.

00:02:10Today, we're talking about the most unpopular reform in Ukraine.

00:02:13We're figuring out why the current solidarity-based pension system doesn't work.

00:02:17Why doesn't it work?

00:02:19What does it actually cost the state?

00:02:21And what needs to be changed?

00:02:23Because in the end, the question is what we want.

00:02:27And in the future, keep patching holes in the system at the expense of the budget,

00:02:31young workers, and future generations.

00:02:32Or finally create a system that can give Ukrainians dignity in old age.

00:02:36Why is Ukraine's solidarity-based pension system a social time bomb?

00:02:42To understand why the Ukrainian pension system is trapped today,

00:02:45it's worth explaining how it works and what it looks like.

00:02:49The origins.

00:02:50All current Ukrainian pensioners come from the Soviet Union.

00:02:53That's where they were born, studied, started working, started families,

00:02:58and accumulated their first savings.

00:03:00At the beginning of 1991, Ukrainians had 48.8 million accounts in the savings bank of the USSR,

00:03:08which held 84.3 billion Soviet rubles.

00:03:12On average, this amounted to 1,727 rubles per account.

00:03:18After the collapse of the USSR, these savings disappeared.

00:03:22They were located in Moscow, and Russia, as the successor to the Soviet Union,

00:03:26effectively refused to fulfill its obligations to the workers whose work benefited the Soviet Union.

00:03:32This was one of the biggest economic losses suffered by Ukrainians during Soviet times.

00:03:37Our research into why Ukrainian pensioners are struggling links the low level of pensions

00:03:42to the loss of savings in the savings bank of the USSR,

00:03:46the weakness of the Ukrainian economy,

00:03:48and the extremely negative, unfavorable demographic situation in the country.

00:03:53Even after Ukraine gained independence,

00:03:56the pension reform that was launched back in 1998 under President Leonid Kuchma failed.

00:04:03The reform did not work,

00:04:05because the provisions of the adopted laws

00:04:07were not supplemented with the necessary changes in tax and financial legislation,

00:04:12the functioning of the stock market, and so on.

00:04:14The key problem was the reluctance of the government at that time

00:04:17to make decisions that could create additional problems or risks for the budget.

00:04:21The actions of subsequent governments steered the pension system toward populist policies.

00:04:27Raising pensions without linking them to the growth of real wages,

00:04:31Soviet-era savings had been lost.

00:04:33And today, the pay-as-you-go pension system is already creating a problem for the future.

00:04:38Its logic is that today's workers finance the pensions of current retirees with their contributions.

00:04:43That is, the money a worker pays in the form of social contributions

00:04:48is not set aside or accumulated for them personally.

00:04:52In other words, it's a pyramid scheme.

00:04:55Your generation supports your parents' generation,

00:04:58and the next generation will support you.

00:05:01Of course, if it exists.

00:05:04However, if the number of workers decreases and the number of retirees increases,

00:05:09it means that in the future, there will potentially be fewer people

00:05:12paying taxes and social contributions,

00:05:15and more people who need to be supported through the pension system.

00:05:19The nation is aging, and this process is happening at the same time

00:05:22as a catastrophically low birth rate.

00:05:25The UN classifies Ukraine as one of the countries with

00:05:28the lowest birth rates in the world.

00:05:30The rate has dropped to one child per woman.

00:05:33And according to Global Change Data Lab, as of 2023,

00:05:37the fertility rate was only 0.98 children per woman.

00:05:43This is less than half as high as the level needed for simple population replacement,

00:05:48not counting migration, which is 2.1 children.

00:05:52The generation that is not being born now, in 20 or 30 years,

00:05:56will not enter the Ukrainian labor market, will not earn a salary,

00:06:00will not pay the unified social contribution,

00:06:02which finances the pension of those who are working today.

00:06:05That is why the demographic crisis has long-lasting financial consequences.

00:06:10At the same time, the potential length of people's working lives is also shrinking.

00:06:14According to the UN Population Fund,

00:06:16the population life expectancy at birth in Ukraine in 2025 was 70 years for men and 80 years for women,

00:06:27and retirement starts at the age of 60.

00:06:29Currently, 67% of Ukraine's population consists of working-age people between 15 and 64 years old,

00:06:38and 19% are elderly.

00:06:42Meanwhile, the proportion of young people is decreasing.

00:06:45The age pyramid is gradually losing its pyramid shape,

00:06:48and the burden on the economically active population is only increasing.

00:06:53Ukraine needs to simultaneously finance a longer period of life for pensioners,

00:06:57and do this with contributions from fewer and fewer people in younger generations.

00:07:01Moreover, the war has made this arithmetic even worse.

00:07:05Since the beginning of the full-scale invasion, the birth rate in Ukraine has halved.

00:07:09In the first half of 2026, over 73,000 births were registered,

00:07:14which is 16% less than the previous year, compared to about 260,000 deaths.

00:07:20On average, about 12,000 children are born every month,

00:07:25whereas 10 years ago, this figure was about 32,000.

00:07:30In addition to demographic aging, there has been a massive outflow of the population abroad.

00:07:35According to the UN Refugee Agency, as of June 30, 2026,

00:07:39there are 5.68 million registered refugees from Ukraine worldwide.

00:07:44Eurostat shows that

00:07:464.4 million people who left Ukraine were under temporary protection in the European Union.

00:07:52This is a population with a certain age structure.

00:07:54About 30% of them are minors.

00:07:58Over 43% are adult women.

00:08:01And 27% are adult men.

00:08:04That means 70% of Ukrainian migrants,

00:08:08or about 3.1 million people,

00:08:10are either potential or actual participants in the labor market of other countries.

00:08:14Ukraine is not just losing its population.

00:08:17It is losing part of its tax base and social insurance contribution base,

00:08:21which means fewer future contributions to the pay-as-you-go pension system.

00:08:25At the same time, the number of people who need to receive these payments does not decrease.

00:08:29In 2025, the Pension Fund of Ukraine provided pension payments to 10.2 million pensioners,

00:08:36for a total amount of over 870 billion RIVNAS.

00:08:40Almost 600 billion was collected through contributions.

00:08:44Unified social contributions from workers.

00:08:46And this is also thanks to unified social contributions from military personnel.

00:08:50And what will happen to the collection of unified social contributions in the event of demobilization?

00:08:55The rest of the pension and social obligations were covered by the state budget.

00:08:59So, the system's own revenues are not enough to finance all the pensioners.

00:09:03When there isn't enough money, the state looks for additional sources of income

00:09:07and introduces or increases various payments,

00:09:10which are directly or indirectly related to pension funding.

00:09:14For example, there is a fee when purchasing passenger cars,

00:09:17real estate transactions, and for mobile communication services.

00:09:214. January to July of 2026,

00:09:2510.6 billion RIVNAS were received by the state budget from these sources.

00:09:30If we look at the situation before the full-scale war,

00:09:34pension payments were the number one expenditure in the expanded budget.

00:09:38The consolidated budget plus extra budgetary funds.

00:09:41In 2021, the total expenditures of the Pension Fund of Ukraine amounted to almost 521 billion RIVNAS,

00:09:50or about 35% of all the country's expenditures.

00:09:54At the same time, 177.6 billion RIVNAS of this amount came directly from the state budget

00:10:01to finance pensions and other planned payments.

00:10:04That is, even before the war,

00:10:06the contributions of insured workers were not enough to independently support the pension system.

00:10:11Its deficit of 34 even then had to be covered at the expense of general budget resources.

00:10:17And the state budget is ultimately taxes from citizens and businesses.

00:10:22Every RIVNAS in the budget has an opportunity cost.

00:10:26If it is directed to cover pension obligations,

00:10:28it can no longer be spent at the same time on a school, university, hospital, or infrastructure.

00:10:34After 2022, defense became the absolute priority,

00:10:38and the structure of the budget changed accordingly.

00:10:41But the pension bill did not disappear.

00:10:43On the contrary, it is even increasing.

00:10:45If over the last five years, from 2021 to 2025,

00:10:50funding for, for example, education,

00:10:53has increased by about 30 from 302.3 to 394 billion UH otters,

00:11:00then the expenditures of the pension fund of Ukraine increased by almost 100 from 520.9 billion UH otters to

00:11:091.32 trillion wahuts.

00:11:12And the more resources are needed just to maintain the old system,

00:11:15the less space is left for investment in youth.

00:11:20And now, let's put these billions in terms of what they mean for an individual.

00:11:25In our tax calculator, the state bill,

00:11:28you can see how the taxes paid by a citizen relate to government expenditures.

00:11:33For a monthly net salary of an officially employed worker of 24,800 UA dollars,

00:11:40over 100,000 UAH will be allocated to pension provision every year.

00:11:45For comparison, almost 9,400 UAH will go to healthcare.

00:11:50This clearly demonstrates that pensions literally consume a larger share of resources than most other social sectors.

00:11:56And how much will this system give back to you in old age?

00:12:00Throughout your life, you work and pay into the pension system through the unified social contribution.

00:12:05So what kind of pension can the state guarantee?

00:12:08In our other pension calculator, you can model your future pension depending on your salary,

00:12:13retirement age, gender, and other parameters.

00:12:16Let's take the simplest scenario as an example.

00:12:19A man with the same salary of 24,800 hodivnias per month

00:12:25retires at 60 years old.

00:12:28General conditions.

00:12:29According to the standard scenario,

00:12:31you will have a future pension of 9,500 hodivnias per month.

00:12:36But if the contributions throughout your working life are not just spent on current pensions,

00:12:40but are accumulated and invested,

00:12:42an alternative calculation gives 31,600 hodivnias per month.

00:12:47That's almost four times more.

00:12:49Of course, this is an approximate amount

00:12:51because the future pension depends on the years of social insurance contributions,

00:12:55the ratio of a person's salary to the average salary in the country,

00:12:59indexations, and other parameters.

00:13:01But it's clear that today's contributions do not build up personal retirement savings

00:13:05of comparable value for that person.

00:13:08The state is spending more and more of the budget on pensions.

00:13:12This requires increasing revenues,

00:13:14and this means either more workers or higher salaries or higher taxes and contributions.

00:13:20Meanwhile, demographics are working in the opposite direction,

00:13:23and simply raising taxes is not a solution.

00:13:25Because if you increase the burden on labor,

00:13:28formal employment becomes more expensive.

00:13:30Some businesses will get an additional incentive to go underground,

00:13:34underreport wages, or refuse to hire.

00:13:37In a 2021 study,

00:13:39Case Ukraine estimated the share of the shadow economy at about 40%.

00:13:44And the more economic activity takes place outside formal employment,

00:13:48or with underreported income,

00:13:50the smaller the base for social contributions.

00:13:53The latest joint study on budget losses from shadow schemes

00:13:57puts wages paid under the table in first place,

00:14:00with up to 262 billion hrivnias in losses for the budget.

00:14:04This is primarily the result of the tax burden on income from labor.

00:14:07However, the pay-as-you-go pension system is also very vulnerable to political populism.

00:14:12Pensioners are a large and politically active group of voters.

00:14:15That's why it's very easy for politicians to promise them pension increases.

00:14:19The future expenses in this case are usually left to the next government.

00:14:23Ukrainian political history knows many such promises.

00:14:26For example,

00:14:27In 2012,

00:14:29former Minister of Social Policy Natalia Korolevska presented the Day Program,

00:14:33which featured a minimum pension of 500 euros and a salary of 1,000 euros.

00:14:39Or,

00:14:40Yulia Timoshenko,

00:14:41in different years,

00:14:42promised to provide pensions at the level of the average salary.

00:14:46But none of these promises came true.

00:14:49Because to do this in Ukraine,

00:14:50it would be necessary either to spend the entire available GDP on pensioners,

00:14:55or to increase its size eightfold.

00:14:57In 2024,

00:14:59maintaining the pension system cost Ukraine about 9.6% of the country's GDP.

00:15:06Previously,

00:15:06it was even more.

00:15:08In 2020,

00:15:1011.4% of the GDP was spent on pensions.

00:15:14For comparison,

00:15:15among countries with a stable and healthy pension system,

00:15:18such as the Netherlands,

00:15:19Denmark,

00:15:20Iceland,

00:15:21and Israel,

00:15:21government spending amounts to about

00:15:235.3% of GDP.

00:15:26The pay-as-you-go pension system

00:15:28easily becomes a hostage of the political cycle.

00:15:31Increases bring political benefits now,

00:15:33but the financial consequences come much later.

00:15:36The forecasts are not encouraging.

00:15:38One of the likely scenarios suggests that in

00:15:4120 to 30 years,

00:15:43only 40% of elderly Ukrainians will be entitled to a state pension

00:15:47under the pay-as-you-go pension system.

00:15:49Social pressure will continue to grow

00:15:52because tax resources will only be enough for meager payments,

00:15:55while elderly people will remain the most active voting bloc.

00:15:59The lack of real pension reform and the social populism of politicians

00:16:03are leading to Ukrainian pensioners becoming poorer,

00:16:07while spending on the pension fund is increasing.

00:16:11Attempts to move from a purely pay-as-you-go pension model

00:16:14to a system where part of the future pension is formed through personal savings

00:16:17began back in the early 2000s.

00:16:21But a mandatory funded pension pillar

00:16:23has not been fully launched in

00:16:2535 years of independence.

00:16:50And here, without false modesty,

00:16:53we can say that we helped keep this issue on the agenda.

00:16:58The price of the state has been explaining the problem for years

00:17:01through the case Ukraine research in particular.

00:17:04Why Ukrainian pensioners are struggling,

00:17:06analyzing what a healthy pension system should be like,

00:17:09and constantly returning to this issue.

00:17:12In our materials and videos,

00:17:14we want to reach out to citizens and lawmakers.

00:17:17The pay-as-you-go pension model is a real social trap.

00:17:21International experience in pension provision.

00:17:24The real situation with Ukrainian pensions.

00:17:27As of July 2026,

00:17:29in Ukraine, almost every fourth pensioner

00:17:32receives about 3,500 hryvnia per month,

00:17:36which is approximately 112 hryvnia per day.

00:17:39Almost a third of pensioners receive payments

00:17:42that exceed the national average.

00:17:43In particular,

00:17:453.2 million people have a pension of more than 7,000 hryvnias.

00:17:49The average pension is 7,236 hryvnias,

00:17:54which is about 140 euros.

00:17:56There is a category of citizens,

00:17:58half a million out of more than 10 million pensioners,

00:18:01who receive more than 20,000 hryvnias.

00:18:04These are retired judges

00:18:06who receive a monthly lifetime allowance,

00:18:09prosecutors, diplomats,

00:18:11former high-ranking state and military officials,

00:18:14law enforcement officers, and so on.

00:18:16This sharply contrasts with pension payments

00:18:19in European countries.

00:18:20According to Eurostat,

00:18:22in 2022,

00:18:24Iceland, Luxembourg, and Norway are at the top,

00:18:28with annual payments of over 30,000 euros.

00:18:31Denmark and Switzerland round out the top five.

00:18:33On the other hand,

00:18:34Italy, France, and Spain

00:18:36pay less than 20,000 euros per recipient,

00:18:39allocating between 9 and 12% of their GDP for this.

00:18:44Let me remind you,

00:18:45for Ukrainian taxpayers,

00:18:46maintaining the pension system

00:18:47costs about 10% of GDP.

00:18:50In Poland,

00:18:51the payments are about 7,000 euros.

00:18:54In Hungary,

00:18:55about 5,000 euros.

00:18:57The conclusion is obvious.

00:18:59Wealthy countries pay their pensioners much more.

00:19:02It is on such simplified comparisons

00:19:04that misleading claims on social media about genocide

00:19:07and the impoverishment of Ukrainian pensioners

00:19:09are often based.

00:19:11Such comparisons are misleading.

00:19:13You can't just compare the size of the Ukrainian

00:19:15pay-as-you-go pension

00:19:17with the average payment in countries

00:19:18where most of the pension income

00:19:20comes from occupational and private pension savings.

00:19:23To understand the real difference,

00:19:25you need to look not only at the amount of the pension,

00:19:28but also at what sources it comes from

00:19:30and who pays for it.

00:19:32How are pension systems organized around the world?

00:19:36The Canadian system combines several levels.

00:19:38The first, basic one,

00:19:40is the Canada Pension Plan,

00:19:42the amount of which depends on a person's contributions

00:19:44and earnings throughout their working life.

00:19:46In 2026,

00:19:48the average payment for new retirees at age 65

00:19:51is about 634 U.S. dollars per month,

00:19:56while the maximum is about 1,089 U.S. dollars.

00:20:01There is also the old age security pension.

00:20:05You don't need to have any work experience to receive it.

00:20:08You can apply for it starting at age 65,

00:20:11even if you have never worked.

00:20:13The amount mainly depends on how long you have lived in Canada

00:20:16after the age of 18.

00:20:19In 2026,

00:20:21the maximum old age pension payment

00:20:23for a person aged 65 to 74

00:20:26is about $632 per month,

00:20:30and the maximum is $1,087.

00:20:35For low-income people,

00:20:37there is additional support,

00:20:38the Guaranteed Income Supplement,

00:20:40which can add up to $810 per month

00:20:42for a single pensioner.

00:20:45It becomes clear that you can't survive in Canada

00:20:48on just government pension checks.

00:20:51In addition to government programs,

00:20:53Canadians have workplace

00:20:54and personal retirement savings,

00:20:56and the provinces can supplement federal support

00:20:58with their own programs.

00:21:00For example,

00:21:02Ontario has gains.

00:21:03In Alberta,

00:21:04the Alberta Seniors Benefit

00:21:05is available to people aged 65 and over

00:21:07with low income.

00:21:09And in the French-speaking province of Quebec,

00:21:12there is the Quebec Pension Plan,

00:21:14Here,

00:21:14delaying retirement until age 72

00:21:16is strongly encouraged

00:21:18as a way to increase payments.

00:21:20Moreover,

00:21:20the longer a person waits,

00:21:22the higher their monthly payment will be.

00:21:25As of 2026,

00:21:27waiting more than doubles the monthly maximum,

00:21:29from $965 at age 60

00:21:33to $2,394 at age 72.

00:21:38Yes,

00:21:39Quebec is reducing the burden

00:21:41on the pension system

00:21:41by encouraging people

00:21:43to stay in the workforce longer,

00:21:45shortening the period of pension payments,

00:21:47and increasing contributions

00:21:48to the system.

00:21:50United States

00:21:51The American model combines

00:21:53public social security

00:21:55with occupational and personal savings.

00:21:57The right to a public pension

00:21:59arises after accumulating

00:22:00at least 40 insurance credits,

00:22:02which for most people

00:22:04means about 10 years of work.

00:22:06The amount of the payment

00:22:08depends on earnings

00:22:08throughout the career.

00:22:09In particular,

00:22:10the best.

00:22:1235 years

00:22:13of income

00:22:14are taken into account,

00:22:15and postponing retirement

00:22:16after the age of 70

00:22:18can increase its amount.

00:22:20But the main role

00:22:21in forming the future pension

00:22:22is played by savings.

00:22:24Defined Contribution Retirement Plans

00:22:27First of all,

00:22:28the pension plan,

00:22:29known as the 401k,

00:22:32which now dominates

00:22:33in the U.S.,

00:22:33the employee directs

00:22:35part of their salary

00:22:35to their own account,

00:22:37and the employer

00:22:37often adds

00:22:38their own contribution.

00:22:39For example,

00:22:4150.

00:22:41For every dollar saved,

00:22:43the company will add

00:22:4450 cents.

00:22:46The accumulated funds

00:22:47are invested,

00:22:48in particular,

00:22:49in stocks and bonds,

00:22:50and each contributor

00:22:51has a certain level of control

00:22:52over their own portfolio.

00:22:53The amount of a personal pension fund

00:22:55depends on when a person

00:22:57started saving money,

00:22:58whether from the age of 25

00:23:00or from 40,

00:23:01what portion of the salary,

00:23:03how much the employer contributes.

00:23:05The amount of the pension contribution

00:23:07is part of the employer's

00:23:09offer to the candidate,

00:23:10where the funds are invested,

00:23:11and so on.

00:23:12We discuss this in detail

00:23:13in the material

00:23:14about the U.S. pension system.

00:23:16Free to Determine Your Own Pension

00:23:18on the Price of the State website.

00:23:20In the U.S.,

00:23:21the amount of pension payments

00:23:22is entirely the responsibility

00:23:23of Americans.

00:23:25In Australia, for example,

00:23:27the state pension does not depend

00:23:28on work experience

00:23:29or place of employment.

00:23:31The main criterion is wealth.

00:23:33The more assets and income you have,

00:23:35the lower the payment.

00:23:37And if your wealth is high enough,

00:23:39you may not receive it at all.

00:23:40The retirement age starts at 67.

00:23:44But the heart of the Australian system

00:23:46is the second level

00:23:47of mandatory savings,

00:23:48the superannuation guarantee.

00:23:50The employer transfers

00:23:5212% of the employee's salary

00:23:54to their pension account.

00:23:56And the funds are invested

00:23:57through pension funds.

00:23:59The employee can choose

00:24:00a saving strategy

00:24:00and, if they wish,

00:24:02make additional

00:24:02voluntary contributions.

00:24:04The third level consists

00:24:05of traditionally voluntary

00:24:06additional contributions.

00:24:09In Australia,

00:24:10every company and every bank

00:24:12has its own pension fund.

00:24:13So, there are many funds.

00:24:15And they differ in terms,

00:24:17the amount of the initial contribution

00:24:18and the interest rates,

00:24:20which gives citizens

00:24:21the opportunity

00:24:22to choose the terms

00:24:23that suit them best.

00:24:24It's a kind of competition

00:24:26in the pension market.

00:24:27This allows people to compete

00:24:29and feel more financially independent

00:24:31in old age.

00:24:32Neighboring New Zealand

00:24:34also has workplace retirement plans.

00:24:36KiwiSaver is a voluntary scheme

00:24:38that supplements NZ Super,

00:24:40the government pension.

00:24:42As of 2025,

00:24:44KiwiSaver has

00:24:463.4 million participants,

00:24:49which is about

00:24:5066%

00:24:51of the total population

00:24:53of New Zealand.

00:24:55That means

00:24:56two-thirds of New Zealanders.

00:24:58They expect full support

00:24:59from the state in retirement

00:25:00and also voluntarily

00:25:02set aside

00:25:03part of their income

00:25:04in pension funds.

00:25:05Since April 2026,

00:25:08the default standard

00:25:09contribution rate

00:25:10for this scheme

00:25:10is 7%

00:25:12of earnings,

00:25:13split equally

00:25:14between the employee

00:25:15and the employer.

00:25:16Employees can choose

00:25:17a higher personal

00:25:18contribution rate

00:25:194,

00:25:206,

00:25:218,

00:25:21or 10%.

00:25:24Thanks to the shift

00:25:25to corporate pensions,

00:25:26New Zealand spends

00:25:27only up to

00:25:285%

00:25:29of its GDP

00:25:30on state benefits,

00:25:32which is lower

00:25:32than the average

00:25:33in OECD countries,

00:25:35which is

00:25:359.4%,

00:25:39and thus

00:25:40reduces the burden

00:25:41on the budget.

00:25:43In Norway,

00:25:44there is a state pension

00:25:45through the National Insurance Scheme,

00:25:47a mandatory employer-sponsored pension

00:25:49that covers the entire

00:25:50private sector

00:25:51and personal savings,

00:25:53including through

00:25:53individual pension agreements.

00:25:55An individual pension,

00:25:57savings.

00:25:58The standard

00:25:59retirement age

00:26:00is 67,

00:26:02but with sufficient

00:26:03pension rights,

00:26:04you can start

00:26:04receiving payments

00:26:05from the age of

00:26:0662

00:26:07and continue working

00:26:08up to

00:26:09and including

00:26:09the age of

00:26:1075.

00:26:12In defined

00:26:13contribution schemes,

00:26:14the accumulated capital

00:26:16in the event

00:26:16of the employee's death

00:26:17is directed to payments

00:26:18for children

00:26:19and other dependents,

00:26:20and the remainder,

00:26:21under certain conditions,

00:26:22becomes part

00:26:23of the inheritance.

00:26:24We discuss

00:26:25the Norwegian pension system

00:26:26in more detail

00:26:27in the video

00:26:28Norway,

00:26:29a social paradise

00:26:30on earth.

00:26:31The main feature

00:26:32of Norway

00:26:33is that it has

00:26:33a huge state financial reserve

00:26:35in the form of

00:26:36the government pension fund global,

00:26:38known as

00:26:38the oil fund.

00:26:40In it,

00:26:41the state accumulates

00:26:42income from oil resources

00:26:43and invests them

00:26:44all over the world,

00:26:46from Tesla

00:26:46and Facebook shares

00:26:47to the Ukrainian

00:26:48egg producer,

00:26:49All Star Union,

00:26:50and the poultry producer,

00:26:52MHP.

00:26:53At the end

00:26:54of the first half

00:26:55of 2026,

00:26:56the fund's value

00:26:57was over

00:26:58$2 trillion.

00:27:00There was also

00:27:01a second,

00:27:01much smaller state fund,

00:27:03the Government Pension Fund

00:27:04Norway,

00:27:05whose capital

00:27:05was formed

00:27:06mainly from the surpluses

00:27:07of the national

00:27:08insurance system.

00:27:09That is,

00:27:10the Norwegian pension model

00:27:11relies on several sources

00:27:13of income at once,

00:27:14and the wealth

00:27:15from oil resources

00:27:16benefits both

00:27:17the current

00:27:17and future generations.

00:27:19In Iceland,

00:27:20the state pension,

00:27:21which one becomes

00:27:22eligible for

00:27:23at age 67,

00:27:24mainly serves

00:27:25a basic social function

00:27:26and amounts

00:27:27to only about

00:27:2815%

00:27:29of the average wage

00:27:30in the country.

00:27:32Instead,

00:27:33the scale of

00:27:33occupational pension savings

00:27:34is impressive.

00:27:36Under the mandatory

00:27:37mutual insurance system,

00:27:39all employees

00:27:40and self-employed persons

00:27:41aged 16 to 70

00:27:43are required to

00:27:44pay a pension contribution

00:27:46of 15.5%

00:27:48of their salary.

00:27:49The insurance premium

00:27:51is divided

00:27:51between the employee

00:27:52and the employer,

00:27:53with the employee

00:27:54paying 4%

00:27:55and the employer

00:27:57at least 11.5%.

00:27:58This contribution

00:28:00is managed by

00:28:0121 autonomous pension funds.

00:28:03The funds are invested

00:28:04in various asset classes,

00:28:06with the largest share,

00:28:0741.5%

00:28:08in 2025,

00:28:10invested in foreign assets.

00:28:12At the end of 2025,

00:28:14the assets of Icelandic pension funds

00:28:16amounted to approximately

00:28:18$71 billion,

00:28:20which is equivalent to about

00:28:21180%

00:28:23of the GDP.

00:28:24In Ukraine,

00:28:25the assets of all

00:28:26non-state pension funds

00:28:27at the beginning of 2025

00:28:28amounted to

00:28:305.7 billion

00:28:31or one-tenth of 1%

00:28:34of the country's GDP.

00:28:36This is the answer

00:28:37to why Ukrainian pensioners

00:28:39are struggling

00:28:39while Icelandic pensioners

00:28:41travel around the world

00:28:42and enjoy life

00:28:43in their old age.

00:28:44As a rule,

00:28:45a person who,

00:28:46throughout their entire career,

00:28:47about 40 years,

00:28:49regularly paid contributions

00:28:50to the occupational pension plan

00:28:52can expect a pension

00:28:53that replaces about

00:28:5472%

00:28:55of their average income.

00:28:58The income replacement rate

00:28:59is a useful measure

00:29:00for comparing pension systems

00:29:02across countries.

00:29:03It shows what portion

00:29:04of their previous earnings

00:29:05a person retains

00:29:07after retirement.

00:29:08The Organization for Economic

00:29:10Cooperation and Development

00:29:11calculates not just

00:29:13the state pension,

00:29:14but the future pension income

00:29:15from mandatory schemes,

00:29:17including both state

00:29:18and private components,

00:29:19as well as taxes

00:29:20and social contributions paid.

00:29:22On average,

00:29:24in the Organization for Economic

00:29:25Cooperation and Development,

00:29:27workers who are entering

00:29:28the labor market now

00:29:29will receive a net pension

00:29:30amounting to 63%

00:29:32of their net salary.

00:29:35This level is often considered

00:29:37a benchmark

00:29:37for adequate pension provision.

00:29:40The pension replacement rate

00:29:42exceeds 85%

00:29:43in Austria,

00:29:44Greece,

00:29:45Luxembourg,

00:29:46Portugal,

00:29:46and Spain,

00:29:47and it is over 95%

00:29:49in the Netherlands

00:29:50and Turkey.

00:29:51On the other hand,

00:29:52they are below 40%

00:29:54in Estonia,

00:29:55Ireland,

00:29:56Korea,

00:29:57and Lithuania.

00:29:58And in Ukraine,

00:29:59this indicator is much lower

00:30:00and today averages

00:30:01from 20% to 25%.

00:30:05This means that

00:30:06after retirement,

00:30:07the average pension payment

00:30:08is only a quarter

00:30:09or a fifth

00:30:10of their previous earnings.

00:30:13Let's recall the example

00:30:15of Denmark,

00:30:16which people like to mention

00:30:17as a country

00:30:17of triumphant socialism.

00:30:19We already mentioned

00:30:20in the video about Denmark

00:30:21that the state pension

00:30:23is only 21%

00:30:25of the average earnings

00:30:26of the working age population.

00:30:28Occupational pension savings

00:30:29provide the bulk

00:30:30of future retirement income.

00:30:32About 90%

00:30:34of working Danes

00:30:35participate

00:30:36in such pension schemes

00:30:37and typical contributions

00:30:39range from

00:30:4010% to 18%

00:30:42of their salary.

00:30:43As a result,

00:30:44a huge pool

00:30:45of pension assets

00:30:46has accumulated

00:30:46in the country.

00:30:47At the end of 2025,

00:30:49total pension assets

00:30:50amounted to

00:30:52$721 billion,

00:30:54which is about

00:30:55one and a half times

00:30:56Denmark's GDP.

00:30:58The Netherlands

00:30:59has one of the strongest

00:31:00pension systems

00:31:01in the world.

00:31:02The state guarantees

00:31:03a basic pension

00:31:04to people who have lived

00:31:05or worked in the country

00:31:06long enough.

00:31:08The retirement age

00:31:09is now 67 years

00:31:11and 3 months

00:31:13and will continue

00:31:14to be linked

00:31:15to life expectancy.

00:31:18In 2026,

00:31:20the full basic pension

00:31:21for a single person

00:31:22will be about

00:31:23€1,662 per month

00:31:26before taxes.

00:31:29Yes,

00:31:30in developed countries

00:31:31pensions are taxed

00:31:33and for couples

00:31:34or cohabitants

00:31:35it's €1,139 per person

00:31:38including taxes.

00:31:40But,

00:31:40like in other countries,

00:31:42the model is not limited

00:31:43to state payments.

00:31:44The Netherlands

00:31:45is currently undergoing

00:31:46a major reform

00:31:47where benefits

00:31:47are more closely linked

00:31:49to contributions

00:31:49and investment results.

00:31:52According to the Central Bank

00:31:53of the Netherlands,

00:31:54by the end of the first quarter

00:31:56of 2026,

00:31:57the assets of Dutch pension funds

00:31:59reached €1.6 trillion,

00:32:02of which €542 billion

00:32:05were transferred

00:32:06to the new pension model.

00:32:09That's why the Netherlands

00:32:10is a great example

00:32:11of how a pension model

00:32:12can be adjusted

00:32:13invested to demographic

00:32:14and financial changes.

00:32:16So it's no surprise

00:32:17that,

00:32:18according to the annual

00:32:19Global Pension Index ranking

00:32:20of the best pension systems,

00:32:22the Netherlands

00:32:22took first place

00:32:23for 2025

00:32:24among 52 countries.

00:32:26the index evaluates

00:32:28the adequacy of payments,

00:32:29the sustainability of the system

00:32:30and the quality

00:32:31of its regulation.

00:32:33Iceland ranks second

00:32:34in this index

00:32:34and Denmark is third.

00:32:37All three systems

00:32:37receive the highest grade,

00:32:39A.

00:32:40Ukraine is not yet a participant

00:32:42in this ranking,

00:32:43but even the most ardent optimist

00:32:45understands that the position

00:32:46of Ukraine's current pension system

00:32:48would be at the very bottom.

00:32:50However,

00:32:51there are also countries

00:32:52where attempts to switch

00:32:53to funded elements

00:32:54did not yield

00:32:55the expected results.

00:32:56A telling example

00:32:57is Czechia,

00:32:58where in 2013,

00:32:59they launched

00:33:00a voluntary second tier

00:33:01with private pension accounts.

00:33:03An employee could direct

00:33:043% of their salary

00:33:07from state insurance contributions

00:33:08to it,

00:33:09but only on the condition

00:33:11that they add another 2%

00:33:13of their own money.

00:33:15However,

00:33:16the system basically

00:33:17didn't take root.

00:33:18Only 1.2%

00:33:20of the working population

00:33:22joined it.

00:33:23The assets amounted

00:33:24to about 0.1% of GDP.

00:33:27Due to such low participation,

00:33:29the government recognized

00:33:30the reform as unsuccessful

00:33:31and already in 2016

00:33:33abolished this scheme.

00:33:34At the same time,

00:33:35Czechia, like Ukraine,

00:33:36faces an aging population

00:33:38and increasing pressure

00:33:39on the solidarity system.

00:33:40And during this time,

00:33:41populism prevails

00:33:42over common sense.

00:33:43If people are not ready

00:33:44to make regular contributions

00:33:46and the state has not created

00:33:47sufficient incentives,

00:33:48the mere existence

00:33:50of pension funds

00:33:50does not guarantee success.

00:33:52An even larger experiment

00:33:54was Chile.

00:33:55In the 1980s,

00:33:56the country replaced

00:33:57the solidarity model

00:33:58with a system

00:33:59of individual accounts

00:34:00managed by private

00:34:01pension fund administrators.

00:34:03At first,

00:34:04workers directed

00:34:0410% of their salary

00:34:06to them.

00:34:07The reform gave

00:34:08a strong boost

00:34:09to long-term savings

00:34:10and the development

00:34:11of the capital market.

00:34:12But the funded model

00:34:14only works

00:34:15when a person

00:34:15makes regular contributions

00:34:16throughout a long career.

00:34:18Only 10 retirees

00:34:20had more than

00:34:2130 years

00:34:22of work experience.

00:34:24Informal employment,

00:34:25unemployment,

00:34:26self-employment,

00:34:27and periods

00:34:28of economic inactivity

00:34:29have led

00:34:30to insufficient savings.

00:34:31As a result,

00:34:32the system required

00:34:33significant government support

00:34:35to protect people

00:34:36with insufficient

00:34:36pension savings.

00:34:37So the main enemy

00:34:39of the funded pension

00:34:40is unstable,

00:34:41employment,

00:34:43and years

00:34:44without contributions.

00:34:45Another illustrative example

00:34:47is given by Argentina.

00:34:48In 1994,

00:34:50the country created

00:34:51a mixed model

00:34:52in which a worker

00:34:53could direct

00:34:5411% of their contribution

00:34:56either to the state system

00:34:58or to a private pension fund.

00:35:00About 80%

00:35:02of participants

00:35:03chose the private option,

00:35:05but due to the outflow

00:35:06of contributions

00:35:06from the solidarity system,

00:35:08a financial gap emerged.

00:35:10And private funds

00:35:12had high administrative costs

00:35:13and mostly invested money

00:35:15in government bonds.

00:35:17So during the economic crisis

00:35:19and the 2008 default,

00:35:21the value of savings

00:35:22dropped sharply.

00:35:24The government

00:35:24nationalized

00:35:25private pension savings,

00:35:26returning participants

00:35:27to the solidarity system.

00:35:29At that time,

00:35:30the funds had accumulated

00:35:31about $24 billion,

00:35:33or 10% of GDP.

00:35:35The state

00:35:36essentially robbed

00:35:37its future pensioners.

00:35:39The Argentine experience

00:35:41clearly shows

00:35:42that pension savings

00:35:43cannot be used

00:35:44as a tool

00:35:45to patch current budget holes

00:35:46or to finance the state.

00:35:49Without property rights protection,

00:35:51independent regulation,

00:35:52and diversified investments,

00:35:54trust in such a system

00:35:55quickly disappears.

00:35:57Problems with deficits

00:35:58can arise

00:35:59even in countries

00:35:59with better economic conditions.

00:36:02Developed Slovenia

00:36:03largely relies

00:36:04on a solidarity model

00:36:05supplemented by voluntary savings.

00:36:07In 2024,

00:36:09the state contributed

00:36:11about 1.4 billion euros

00:36:13to the pension system,

00:36:15or 9% of all budget expenditures,

00:36:18and almost one-fifth

00:36:20of pension funding

00:36:21was actually provided

00:36:22by transfers,

00:36:23not by insurance contributions.

00:36:25The main reason

00:36:26for the depletion

00:36:27of the pension fund

00:36:27is the low contribution rate

00:36:29from employers.

00:36:30There is quite a significant gap.

00:36:31The employee pays

00:36:3215.5% of their salary,

00:36:35while the employer's contribution

00:36:37is only 8%.

00:36:39Starting from 2026,

00:36:42Slovenia will carry out

00:36:43a large-scale reform.

00:36:44The retirement age

00:36:45is gradually increasing

00:36:47to 62 years

00:36:48for early retirement

00:36:50and 67 years

00:36:52for the standard retirement.

00:36:54The country is forced

00:36:55to keep people

00:36:55in the labor market longer

00:36:57and to adjust

00:36:58the pension payment rules

00:36:59so that the solidarity model

00:37:00remains financially viable.

00:37:02After the 1999 reform,

00:37:04Lithuania established

00:37:06a multi-level system.

00:37:08The employee pays

00:37:103% of their salary.

00:37:11The state adds

00:37:121.5% of the national average salary

00:37:15in the country

00:37:16and also

00:37:17with voluntary pension provision.

00:37:19Starting from 2026,

00:37:21participation in the second pension pillar

00:37:23became voluntary.

00:37:24Already in the first quarter of 2026,

00:37:27almost 40 participants

00:37:29stopped accumulating

00:37:30and people

00:37:31aged 25 to 35

00:37:33and employees

00:37:34with average incomes

00:37:35showed particular interest

00:37:37in leaving.

00:37:37Accordingly,

00:37:38this may increase the burden

00:37:40on the state system.

00:37:41Moreover,

00:37:42the demographic foundation,

00:37:43as in Czechia

00:37:44and most post-Soviet countries,

00:37:46is weakening.

00:37:46As of 2024,

00:37:48the fertility rate,

00:37:50that is,

00:37:50the number of children

00:37:51born per woman,

00:37:53was 1.1%.

00:37:55According to the EU forecast,

00:37:58the demographic burden

00:37:59from elderly people

00:38:00by 2050

00:38:01may increase to

00:38:0253.7%.

00:38:05The projected net pension

00:38:07replacement rate

00:38:08for an average worker

00:38:09in Lithuania

00:38:09remains below 35%,

00:38:11which is one of the lowest rates

00:38:13among the countries

00:38:14of the Organization

00:38:15for Economic Cooperation

00:38:17and Development.

00:38:17A similar situation

00:38:19exists in Poland.

00:38:20The first level

00:38:21operates on a

00:38:22pay-as-you-go basis

00:38:23through the

00:38:23Social Insurance Institution,

00:38:25ZUS,

00:38:26while the funded part

00:38:27is supplemented

00:38:28by occupational

00:38:29and personal

00:38:29savings mechanisms.

00:38:31However,

00:38:31the projected replacement rate

00:38:33from mandatory schemes

00:38:34is 40.6%

00:38:36of the salary,

00:38:37which stands

00:38:38in sharp contrast

00:38:39to the Netherlands

00:38:39or Denmark.

00:38:40International experience

00:38:41shows two important things

00:38:43at the same time.

00:38:44A solidarity-based system

00:38:46without additional savings

00:38:47becomes increasingly vulnerable

00:38:49to population aging.

00:38:50But a funded system

00:38:51without stable employment,

00:38:53sufficient contributions,

00:38:54and long-term investment

00:38:56does not solve the problem

00:38:57automatically either.

00:38:59That's why

00:39:00the most resilient models

00:39:01combine a basic

00:39:02state guarantee,

00:39:03mandatory occupational

00:39:04pension savings,

00:39:05and voluntary savings.

00:39:07And most importantly,

00:39:09these components

00:39:09work simultaneously,

00:39:11not as substitutes

00:39:12for each other.

00:39:13Financing the pension system.

00:39:15Where to get the money

00:39:16and how to make it work.

00:39:18According to the Organization

00:39:20for Economic Cooperation

00:39:21and Development,

00:39:22at the end of 2024,

00:39:25pension plans

00:39:25in the organization's countries

00:39:27managed approximately

00:39:2860 to 63 trillion dollars

00:39:31in assets.

00:39:32This is not just

00:39:33saving for old age.

00:39:34Pension funds

00:39:35are the largest investors

00:39:36in the world.

00:39:37In eight countries

00:39:38of the Organization

00:39:38for Economic Cooperation

00:39:39and Development,

00:39:40assets already exceed

00:39:41the size of GDP.

00:39:42In particular,

00:39:43in Denmark,

00:39:43they amount to

00:39:44206%

00:39:46of the country's

00:39:46annual GDP.

00:39:47Iceland,

00:39:49191%.

00:39:49Switzerland,

00:39:51almost 167%.

00:39:53Canada,

00:39:54almost 158%.

00:39:56The USA,

00:39:58153%.

00:39:59The Netherlands,

00:40:00150%.

00:40:01Australia,

00:40:03135%.

00:40:03Sweden,

00:40:04116%.

00:40:05These are huge

00:40:06amounts of money.

00:40:07They are not just

00:40:08sitting in bank accounts,

00:40:09but are part

00:40:10of a large mechanism

00:40:11that transforms people's

00:40:12savings into investment

00:40:13capital.

00:40:15A striking example

00:40:16is Norway.

00:40:17The government pension

00:40:18fund Global,

00:40:19which we have already

00:40:20mentioned,

00:40:21receives state revenues

00:40:22from oil sales.

00:40:23The energy giant

00:40:24Equinor,

00:40:25which operates

00:40:25in 36 countries

00:40:27around the world,

00:40:27is one of the main

00:40:28sources of funding

00:40:29for the sovereign fund.

00:40:31As the majority owner,

00:40:32the Norwegian government

00:40:33retains a controlling stake

00:40:34in the company in Europe.

00:40:36It owns 67%

00:40:37of the shares.

00:40:38The rest are freely traded

00:40:40on the Oslo

00:40:40and New York

00:40:41stock exchanges.

00:40:42The scale of this system

00:40:43is enormous.

00:40:44By the end of 2025,

00:40:46its value was about

00:40:48$2.1 trillion.

00:40:50In 2025 alone,

00:40:52the fund earned

00:40:54$235 billion

00:40:55in investment income.

00:40:58About 71%

00:40:59of its assets

00:41:01were invested in stocks,

00:41:0226.5% in bonds

00:41:04and other instruments.

00:41:06Fixed Income Instruments

00:41:07The rest is in real estate

00:41:09and renewable energy

00:41:10infrastructure.

00:41:11So,

00:41:12Norway exchanges

00:41:13part of the income

00:41:14from an exhaustible

00:41:15natural resource

00:41:16for assets

00:41:17that can generate returns

00:41:19for future generations

00:41:20for decades to come.

00:41:23Another illustrative example

00:41:24is Poland.

00:41:25Its largest

00:41:26multi-energy group,

00:41:28or LEN,

00:41:28is a public company

00:41:29whose shares are listed

00:41:30on the Warsaw Stock Exchange.

00:41:33At the same time,

00:41:34the state remains

00:41:35its largest shareholder

00:41:36with a 49.9% stake.

00:41:39Another,

00:41:405.26% of shares

00:41:43belong to the

00:41:44Nationale Niederlanden

00:41:45Pension Fund,

00:41:46one of the open pension funds

00:41:48in Poland,

00:41:49managed by the

00:41:50Dutch financial group

00:41:51NN Group.

00:41:53Its assets exceed

00:41:54$28 billion

00:41:55and are formed

00:41:57from the savings

00:41:58of about

00:41:582.6 million clients

00:42:00and a portfolio

00:42:01of shares

00:42:02in 150 companies.

00:42:04This is the fundamental difference.

00:42:07Not simply using up

00:42:08the resources

00:42:08and spending the money received,

00:42:10but turning that money

00:42:11into a long-term

00:42:12financial asset.

00:42:14Yes,

00:42:15pension savings

00:42:15create a large amount

00:42:16of capital

00:42:17that works in the economy.

00:42:19Ukraine today

00:42:20has the opposite problem.

00:42:22There is very little

00:42:23long-term domestic capital

00:42:24in the country.

00:42:25In theory,

00:42:26Ukrainian companies

00:42:27can raise funds

00:42:28by issuing bonds

00:42:29or shares.

00:42:30But the question arises,

00:42:31who will buy them?

00:42:33Large investors are needed,

00:42:35those who have money

00:42:36and are ready

00:42:36to invest it,

00:42:37for years.

00:42:38That's why

00:42:39Ukrainian business

00:42:40has historically focused

00:42:41on international

00:42:42capital markets.

00:42:44For example,

00:42:45DTEC has repeatedly

00:42:46issued and listed

00:42:47bonds on the

00:42:48Irish stock exchange

00:42:49Euronext Dublin,

00:42:51such as green euro bonds

00:42:53or euro bonds

00:42:54of the oil and gas division.

00:42:57Medinvest issued euro bonds

00:42:59that were placed

00:42:59among international investors

00:43:01in London,

00:43:02Ukraine,

00:43:02and the USA.

00:43:05In 2021,

00:43:07the National Securities

00:43:08and Stock Market Commission

00:43:09even authorized euro bonds

00:43:11issued through foreign issuers

00:43:13to be traded in Ukraine.

00:43:15That is,

00:43:16Ukrainian businesses

00:43:17have a demand for capital,

00:43:19but a significant part of them

00:43:20are forced to look for money

00:43:22where there is already

00:43:23a large pool of investors.

00:43:25The funded pension system

00:43:27can potentially change

00:43:28this situation.

00:43:29If millions of Ukrainians

00:43:31regularly make

00:43:32pension contributions,

00:43:33this money will accumulate

00:43:34in the funds.

00:43:36The funds, in turn,

00:43:38will look for where

00:43:38to invest them.

00:43:39This capital can be invested

00:43:41in Ukrainian businesses,

00:43:43government and corporate bonds,

00:43:44and infrastructure.

00:43:46This can become

00:43:47especially important

00:43:48for post-war reconstruction.

00:43:50Then the money

00:43:51that people set aside

00:43:52for their own retirement

00:43:53will also help

00:43:54grow the economy.

00:43:56For the state,

00:43:57this potentially means

00:43:58less pressure on the budget.

00:43:59For business,

00:44:00a new source of financing.

00:44:02For the financial system,

00:44:04the emergence

00:44:04of a major domestic investor.

00:44:06For citizens,

00:44:07building their own

00:44:08retirement savings

00:44:09instead of depending

00:44:10entirely on what

00:44:11the government can afford.

00:44:13But there is

00:44:13a fundamental condition here.

00:44:15Pension money

00:44:16must be protected.

00:44:18Pension reform by itself

00:44:19will not create

00:44:20a stock market.

00:44:21First,

00:44:22there must be money

00:44:23that can be invested

00:44:24and the state

00:44:25must simultaneously

00:44:26create rules

00:44:27under which this money

00:44:28can be invested safely.

00:44:30Investor protection,

00:44:31company transparency,

00:44:33rights of minority shareholders,

00:44:35independent supervision,

00:44:36and a sufficient number

00:44:37of reliable financial instruments.

00:44:39The Organization

00:44:39for Economic Cooperation

00:44:41and Development

00:44:42also emphasizes

00:44:43the need to develop

00:44:44the regulatory environment,

00:44:46investment opportunities,

00:44:47and the role of

00:44:48pension funds

00:44:50as domestic institutional investors.

00:44:52At the same time,

00:44:53pension assets themselves

00:44:54must be protected

00:44:55and investment rules

00:44:57must be transparent.

00:44:58That is why Ukraine

00:45:00needs not just a stock

00:45:01market on paper,

00:45:02but a capital market

00:45:03that can be trusted

00:45:04with the long-term

00:45:05savings of millions of people.

00:45:08Long-term pension savings

00:45:09are an asset

00:45:10for the financial sector.

00:45:12Pension savings

00:45:13have one important advantage.

00:45:14A person can start

00:45:16saving at 25 years old

00:45:18and not need these funds

00:45:19for another 35 to 40 years.

00:45:21For the financial system,

00:45:23this is a valuable resource

00:45:24because these funds

00:45:25can be directed

00:45:26into long-term assets.

00:45:28For example,

00:45:29in Denmark,

00:45:29pension funds invest

00:45:30in housing and business loans.

00:45:32By the end of 2025,

00:45:35Pension Denmark

00:45:35had invested about

00:45:37$5.8 billion

00:45:38in government

00:45:40and mortgage bonds.

00:45:41In Ukraine,

00:45:42this could be put to use

00:45:44through a reverse mortgage.

00:45:46In our article,

00:45:48we explain the mechanism

00:45:49by which an elderly person

00:45:50can receive financial support

00:45:52secured by their own home

00:45:54while continuing

00:45:54to live in it.

00:45:56For Ukraine,

00:45:57this is especially relevant

00:45:59since a significant part

00:46:00of household wealth

00:46:01is traditionally concentrated

00:46:02in real estate.

00:46:04Therefore,

00:46:05the issue of a future pension

00:46:06is not limited solely

00:46:07to monthly payments

00:46:08from the state.

00:46:09A person can have

00:46:11a state pension,

00:46:12pension savings,

00:46:13an investment portfolio,

00:46:14and even real estate

00:46:15as an asset.

00:46:17State-owned enterprises

00:46:18as a transitional resource

00:46:20Pension funds around the world

00:46:22operate through

00:46:23various financial instruments.

00:46:24For Ukraine,

00:46:25this does not mean

00:46:26that it is necessary

00:46:27to copy Norway's approach

00:46:28or that of another country.

00:46:30Ukraine has neither

00:46:31comparable natural resources

00:46:33nor the corresponding revenues,

00:46:34but the principle itself

00:46:36can be applied

00:46:37to what the state already has,

00:46:38its own enterprises.

00:46:41One can argue endlessly

00:46:42about which state enterprises

00:46:44should be privatized

00:46:45and which should remain

00:46:46in state ownership.

00:46:48But if the state decides

00:46:50to keep a company,

00:46:51it shouldn't mean

00:46:52that it gets special status

00:46:53and can operate inefficiently

00:46:55for years

00:46:55or at the taxpayer's expense.

00:46:59A state enterprise

00:47:00should be a fully-fledged

00:47:01corporate asset

00:47:02that generates profit.

00:47:05An efficient state company

00:47:07brings dividends

00:47:07to the state,

00:47:08increases its own equity value,

00:47:10and attracts investments.

00:47:12An inefficient one

00:47:13turns into a consumer

00:47:15of taxpayers' money.

00:47:16Let's take the residential gas market,

00:47:19where the monopoly

00:47:19is held by the state company

00:47:21Naftogaz.

00:47:22At one time,

00:47:23the authorities required

00:47:25state-owned gas producers

00:47:26to sell it gas

00:47:27for household use

00:47:28at regulated prices.

00:47:30As a result,

00:47:31the company could not

00:47:32fully operate

00:47:33according to market principles,

00:47:34and the low gas price

00:47:35created weak incentives

00:47:37to conserve gas

00:47:38and improve energy efficiency.

00:47:39It was more of a tool

00:47:41to appease the electorate

00:47:42and the population

00:47:43rather than

00:47:44a well-considered policy.

00:47:45A family that receives

00:47:47a heating discount

00:47:48consumes a third

00:47:49more natural gas

00:47:50than a family

00:47:50that pays the full cost

00:47:52of heating.

00:47:53Moreover,

00:47:54subsidies were provided

00:47:55for the consumption

00:47:56of both the rich

00:47:57and the poor,

00:47:58while the rich

00:47:59used more gas.

00:48:00For example,

00:48:01gas consumption

00:48:02in a large upscale house

00:48:03near Kiev

00:48:04is subsidized

00:48:05from the budget

00:48:06at the expense of taxes

00:48:07paid by the entire population

00:48:09of the country,

00:48:10just like the consumption

00:48:11of a low-income

00:48:12rural household.

00:48:13In Europe,

00:48:14it works differently.

00:48:15There,

00:48:16they practice targeted

00:48:17and direct subsidy policies,

00:48:18which are more effective

00:48:19from an economic point of view.

00:48:21It provides assistance

00:48:22to socially vulnerable groups

00:48:24of the population,

00:48:25but not through incentives,

00:48:26not by setting low prices

00:48:28for everyone,

00:48:28but by providing assistance

00:48:30specifically to those

00:48:31who need it,

00:48:32while a market price

00:48:33is set for everyone else.

00:48:34An important shift

00:48:36in this direction

00:48:36took place

00:48:37after 2014,

00:48:39when Naftagas

00:48:40began a large-scale

00:48:41transformation

00:48:41of corporate governance.

00:48:43The company implemented

00:48:44standards recommended

00:48:45by the Organization

00:48:46for Economic Cooperation

00:48:47and Development,

00:48:48a professional supervisory board

00:48:50with independent directors,

00:48:51a clearer division of powers

00:48:53between the state

00:48:53as the owner

00:48:54and management,

00:48:55transparency,

00:48:56internal control,

00:48:57and restrictions

00:48:58on political interference.

00:48:59These changes

00:49:00took place

00:49:01in parallel

00:49:01with the gas market reform

00:49:03and the fulfillment

00:49:04of Ukraine's obligations

00:49:05to international partners.

00:49:06The essence

00:49:07was fundamental.

00:49:08The state company

00:49:10had to stop being a tool

00:49:11for discretionary price controls

00:49:13and become

00:49:14a normal corporate asset.

00:49:16Under new management,

00:49:18the state company

00:49:19turned from a black hole

00:49:20in the state budget

00:49:21into the largest source

00:49:22of revenue

00:49:22for the country.

00:49:23In 2017,

00:49:25Naftagas posted

00:49:26its highest net profit

00:49:27in its 20-year history.

00:49:28Payments to the state budget

00:49:30amounted to

00:49:30110 billion rivnias,

00:49:33or about 15%

00:49:35of the budget's revenues.

00:49:36And in 2018,

00:49:38the enterprises

00:49:39that are part

00:49:40of the Naftagas group

00:49:41paid 138.6 billion rivnias

00:49:44to the state treasury,

00:49:46providing about 19%

00:49:48of Ukraine's budget revenues.

00:49:50Unfortunately,

00:49:51the new political leadership

00:49:52has curtailed

00:49:52the company's development.

00:49:54Since 2020,

00:49:55gas prices have been frozen,

00:49:56which are

00:49:57two to three times

00:49:58lower than market prices.

00:50:00Naftagas is once again

00:50:01a loss-making company

00:50:03that is accumulating debts.

00:50:05The same logic applies

00:50:06to other state-owned enterprises,

00:50:08banks,

00:50:08and other assets.

00:50:10And if they remain state-owned,

00:50:12they must operate

00:50:13under transparent

00:50:14corporate rules

00:50:15and generate profit.

00:50:18And then profitable

00:50:19state-owned enterprises

00:50:21can become

00:50:21one of the sources

00:50:22of funding

00:50:23for the transition period

00:50:24to the funded pension system.

00:50:26Let's imagine

00:50:27that the state decides

00:50:28to redirect

00:50:29part of the current

00:50:30unified social contribution

00:50:31to the transition

00:50:32to the funded pension system.

00:50:33The reform cannot happen

00:50:35all at once.

00:50:35From the current,

00:50:3622% of the salary,

00:50:38part of the contribution,

00:50:40for example,

00:50:4117% should be redirected

00:50:43to finance

00:50:44the solidarity system.

00:50:45And the remaining,

00:50:465%,

00:50:47will go to individual

00:50:48funded accounts.

00:50:49But then,

00:50:50the problem of the so-called

00:50:51transitional deficit arises.

00:50:53The pension fund

00:50:54will have a budget gap

00:50:55because there will be

00:50:56a lack of funds

00:50:57for the current generation

00:50:58of pensioners

00:50:59since they have already

00:51:00finished their working lives

00:51:01and will not be able

00:51:02to form their own savings.

00:51:04Their pensions

00:51:05will still have to be financed

00:51:07by the state

00:51:07on a solidarity basis.

00:51:09A transitional resource

00:51:10is needed

00:51:10that will allow

00:51:11for the simultaneous financing

00:51:13of current pensioners

00:51:14and the gradual accumulation

00:51:15of funds

00:51:16for future ones.

00:51:17And one of its potential sources

00:51:19could be the income

00:51:20from state assets,

00:51:21dividends from state-owned

00:51:22companies,

00:51:23income from state banks

00:51:25and other property,

00:51:26which,

00:51:26after corporate reform,

00:51:28will work efficiently

00:51:28and generate income.

00:51:30Another potential way

00:51:31to offset the shortfall

00:51:32could be a tax

00:51:33on land and real estate.

00:51:34In Ukraine,

00:51:35the real estate tax

00:51:36brings in 0.04% of GDP,

00:51:39while in many countries,

00:51:41revenues from such a tax

00:51:42reach about 1% of GDP.

00:51:44That is 25 times more.

00:51:47Moreover,

00:51:47legal entities

00:51:48bore the main tax burden.

00:51:49They accounted for

00:51:5093 of the revenues.

00:51:52While individuals

00:51:53accounted for only

00:51:547 due to significant benefits,

00:51:57a weak tax database

00:51:58and taxation

00:51:59based on area

00:52:00rather than the value

00:52:01of the property.

00:52:01In Ukraine,

00:52:02the property tax rate

00:52:03for individuals

00:52:04is set by local councils.

00:52:06However,

00:52:06it cannot exceed

00:52:071.5%

00:52:08of the minimum wage

00:52:09per

00:52:101 square meter

00:52:11of taxable area.

00:52:13In

00:52:132026,

00:52:15this will be

00:52:15no more than

00:52:17126

00:52:17and 70

00:52:19per 1 square meter.

00:52:21For individuals' housing,

00:52:23there are tax-free

00:52:23floor area allowances.

00:52:25The tax is charged

00:52:25only on the area

00:52:26exceeding

00:52:2760 square meters

00:52:28for an apartment

00:52:29and

00:52:29120 square meters

00:52:31for a residential house.

00:52:32For example,

00:52:33if an apartment

00:52:34is 80 square meters,

00:52:3620 square meters

00:52:37are taxed.

00:52:38At the maximum tax rate

00:52:40for 2026,

00:52:42the owner will pay

00:52:42only

00:52:433,113

00:52:45rivnias

00:52:45per year.

00:52:46It doesn't matter

00:52:47if it's an

00:52:4880 square meter

00:52:49apartment

00:52:49in Kiev

00:52:50on Kreschatik

00:52:51for

00:52:52$389,000

00:52:54or

00:52:55Inzitomir

00:52:55for

00:52:56$88,000.

00:52:57The tax amount

00:52:58will be the same

00:52:59for both owners.

00:53:01So what specific

00:53:02decisions does Ukraine

00:53:03need to make

00:53:04to save the pension system?

00:53:05What needs to be

00:53:06changed in Ukraine?

00:53:09The first step

00:53:10is obvious.

00:53:11Stop postponing

00:53:11structural reform

00:53:12and apply different rules

00:53:14to different generations.

00:53:15For younger workers,

00:53:16gradually introduce

00:53:17a mandatory

00:53:18funded component.

00:53:19And for older people,

00:53:20keep the

00:53:21pay-as-you-go

00:53:21pension system

00:53:22so as not to shift

00:53:23the entire burden

00:53:24of the transition

00:53:25onto those

00:53:26who are already

00:53:26close to retirement.

00:53:27The logic could be

00:53:28something like this.

00:53:29For people

00:53:30under 40,

00:53:31immediately direct

00:53:32part of the

00:53:32unified social contribution

00:53:34to personal savings.

00:53:35For the

00:53:3640-50 age group,

00:53:38provide for

00:53:38state co-financing

00:53:40and make it

00:53:40more generous

00:53:41for the older people

00:53:42in this group.

00:53:43This will allow us

00:53:44not to create

00:53:44a new payroll tax

00:53:45but gradually

00:53:46redirect the

00:53:47existing contribution.

00:53:49Funds contributed

00:53:50to the funded

00:53:50pension system

00:53:51will not just sit idle

00:53:52but

00:53:52will be invested.

00:53:54What exactly

00:53:54they will be invested in

00:53:55is a separate question.

00:53:57For example,

00:53:58in Ukrainian

00:53:58domestic government bonds

00:54:00which offer high yields.

00:54:01To solve the problem

00:54:02of the transition period,

00:54:04as we have already discussed,

00:54:06a separate transition fund

00:54:07is needed.

00:54:07The funds of which

00:54:08will be used to finance

00:54:09pay-as-you-go pension benefits

00:54:11as current contributions decrease.

00:54:13It may be filled,

00:54:14for example,

00:54:15with revenues

00:54:15from the privatization

00:54:16of state

00:54:17and municipal assets.

00:54:18In 2025,

00:54:20the state property fund

00:54:21received more than

00:54:226.3 billion

00:54:23rivnias

00:54:24of such revenues.

00:54:25But for a full transition

00:54:27to the funded system,

00:54:28this is obviously

00:54:29not enough.

00:54:30That's why it's more important

00:54:32to turn state assets

00:54:33into a steady source

00:54:34of profit.

00:54:35For enterprises

00:54:36that must remain

00:54:37in state ownership,

00:54:39this means

00:54:39professional supervisory boards,

00:54:41independent corporate governance,

00:54:43minimizing political interference,

00:54:45market-based pricing

00:54:47for gas in particular.

00:54:48Thus,

00:54:49the funds of state enterprises

00:54:50will create a bridge

00:54:51between the old

00:54:52and the new systems.

00:54:53The second,

00:54:54unpopular,

00:54:55but not inevitable issue,

00:54:56concerns the retirement age

00:54:58and years of pension contributions.

00:54:59As of 2026,

00:55:01in Ukraine,

00:55:02you can receive a pension

00:55:03at the age of 60

00:55:04if you have at least

00:55:0533 years of pension contributions.

00:55:08At 63 years old,

00:55:09with 23 years

00:55:10of pension contributions,

00:55:12and at 65,

00:55:13with 15 years

00:55:14of pension contributions.

00:55:15The proposed solution

00:55:16may involve

00:55:17a gradual move

00:55:18toward 65 years

00:55:19of age

00:55:20and about

00:55:2139 to 40 years

00:55:23of pension contributions,

00:55:24and not

00:55:25in a single leap.

00:55:26For example,

00:55:27the increase in age

00:55:28can be spread

00:55:29over three stages within,

00:55:31five years,

00:55:32and people over 55 years old

00:55:33would not be affected.

00:55:34The closer a person

00:55:35is to retirement,

00:55:36the longer

00:55:37the transition period

00:55:38should be.

00:55:39As we have seen,

00:55:40in many countries,

00:55:41the retirement age

00:55:42is gradually being raised

00:55:43and linked

00:55:44to demographic reality.

00:55:45And here it is necessary

00:55:46to take into account

00:55:47Ukraine's particular circumstances.

00:55:50Raising the retirement age

00:55:51without simultaneously

00:55:52increasing the duration

00:55:54of healthy

00:55:54and economically active life

00:55:56would be wrong.

00:55:57So pension reform

00:55:58must go hand-in-hand

00:56:00with preventive medicine,

00:56:01early diagnostics,

00:56:02better working conditions,

00:56:04and policy.

00:56:05Reducing premature mortality,

00:56:07especially among men

00:56:08who

00:56:09still have a very large gap

00:56:11with women

00:56:11in life expectancy.

00:56:1365 years for men

00:56:15and

00:56:1673.4 years for women

00:56:18in the pre-war year

00:56:20of

00:56:202021.

00:56:22The retirement age

00:56:23is a politically

00:56:24unpleasant topic,

00:56:25but it's impossible

00:56:25to avoid it forever.

00:56:27France clearly shows

00:56:28the cost of such a decision.

00:56:29The

00:56:302023 reform

00:56:31provided for a gradual

00:56:33increase

00:56:33from 62 to 64 years

00:56:36of age

00:56:37and

00:56:38accelerated the requirement

00:56:39for the necessary

00:56:40work experience

00:56:41to

00:56:4143 years.

00:56:43Against this,

00:56:44there were massive protests

00:56:45with a total of

00:56:461.28 million participants.

00:56:49Despite this,

00:56:50the reform

00:56:51was adopted

00:56:51and came into force

00:56:53in

00:56:53September

00:56:542023.

00:56:55Even in a much

00:56:55wealthier country,

00:56:57people find an increase

00:56:58in the retirement age

00:56:59painful.

00:57:00Therefore,

00:57:00such a change requires

00:57:01not only political will,

00:57:03but also clear communication

00:57:04about what exactly

00:57:05people will receive

00:57:07in return.

00:57:08The third component

00:57:09of the reform

00:57:09should concern

00:57:10voluntary savings

00:57:11in labor taxes.

00:57:12Here,

00:57:13it is important

00:57:13not to increase

00:57:14the tax burden

00:57:15on salaries,

00:57:15but rather to

00:57:16gradually free up

00:57:17resources

00:57:18for personal

00:57:19savings.

00:57:21At one time,

00:57:22the head of the

00:57:22tax committee

00:57:23of the Verhovno Rada

00:57:24of Ukraine,

00:57:25Danilo Hetmansev,

00:57:26proposed to reduce

00:57:27the effective tax rate

00:57:28to 28%.

00:57:29If you reduce

00:57:30it from the current

00:57:3137%,

00:57:32that would mean

00:57:32a reduction

00:57:33of 1.1 percentage

00:57:34point,

00:57:35or by up to

00:57:360.8 percentage

00:57:37points each year.

00:57:38Another element

00:57:39that needs to be

00:57:40reconsidered

00:57:41is the rejection

00:57:41of automatic

00:57:42pension indexation.

00:57:44Instead of

00:57:45universal indexations,

00:57:46it is more

00:57:47rational to use

00:57:48targeted protection

00:57:49for lower pensions

00:57:50while large payments

00:57:52should not receive

00:57:53automatic compensation

00:57:54during the transition

00:57:55period.

00:57:56The money

00:57:57that people

00:57:57will start to

00:57:58accumulate

00:57:58need somewhere

00:57:59it can be

00:57:59invested.

00:58:00And here,

00:58:01the pension issue

00:58:02inevitably intersects

00:58:03with the stock

00:58:03market reform

00:58:04and the protection

00:58:05of investors' rights.

00:58:06A minority

00:58:07shareholder,

00:58:08that is,

00:58:08a person

00:58:09or a fund

00:58:10that owns

00:58:10a stake

00:58:11in a company,

00:58:12should not have

00:58:13to buy

00:58:1350 plus 1 share

00:58:15to participate

00:58:16in key decisions.

00:58:17For a small

00:58:17investor,

00:58:18it is just as

00:58:19critically important

00:58:19that their

00:58:20investments are

00:58:21protected from

00:58:22abuses by

00:58:22controlling owners

00:58:23and that the

00:58:24investor has

00:58:25access to

00:58:25information and

00:58:26participation

00:58:27mechanisms.

00:58:28The National

00:58:28Commission on

00:58:29Securities and

00:58:30Stock Markets

00:58:31states that in

00:58:322026 and

00:58:332027,

00:58:35it is focusing

00:58:35on implementing

00:58:36European Union

00:58:37legislation,

00:58:38strengthening investor

00:58:39protection,

00:58:40modern corporate

00:58:41governance,

00:58:42and developing

00:58:43investment instruments.

00:58:44The commission

00:58:45names investor

00:58:45rights protection

00:58:46as one of the

00:58:47key areas of

00:58:48reform,

00:58:48and among the

00:58:49new initiatives

00:58:50are simplifying

00:58:51non-public

00:58:51share issuances,

00:58:53modernizing infrastructure,

00:58:54and updating the

00:58:55rules for voluntary

00:58:56pension plans.

00:58:57Protection of

00:58:58property rights

00:58:58is impossible

00:58:59without judicial

00:59:00reform.

00:59:00Therefore,

00:59:01the rule of

00:59:02law is a key

00:59:03component for

00:59:04building trust

00:59:05in financial

00:59:05institutions.

00:59:06A separate issue

00:59:07is trust in

00:59:08financial institutions.

00:59:10Here, Ukraine

00:59:10already has

00:59:11experience to

00:59:12rely on.

00:59:12During the

00:59:13cleanup of the

00:59:14banking system

00:59:14from 2014 to

00:59:162018,

00:59:17103 banks

00:59:19were removed

00:59:20from the

00:59:20market,

00:59:21accounting for

00:59:21about a

00:59:22third of the

00:59:22sector's assets.

00:59:23The NBU

00:59:24simultaneously

00:59:25strengthened

00:59:25supervision over

00:59:26the banks

00:59:26and introduced

00:59:28regular assessments

00:59:28of their

00:59:29stability.

00:59:29In 2025,

00:59:32stress testing

00:59:32covered the

00:59:3321 of the

00:59:34largest banks

00:59:35accounting for

00:59:36over 90% of

00:59:37the system's

00:59:38assets,

00:59:38and even under

00:59:39an unfavorable

00:59:40scenario,

00:59:41the banking

00:59:41sector maintains

00:59:42a sufficient

00:59:42capital buffer.

00:59:43For pension

00:59:44reform,

00:59:45this is

00:59:45critically

00:59:45important,

00:59:46because

00:59:46Ukrainians

00:59:47have

00:59:48completely

00:59:48understandable

00:59:49reasons to

00:59:49ask,

00:59:49what will

00:59:50happen to

00:59:50my savings

00:59:51in 20

00:59:52or 30

00:59:52years.

00:59:53The memory

00:59:54of devalued

00:59:55deposits at

00:59:55the Savings

00:59:56Bank of

00:59:56the USSR

00:59:57and pyramid

00:59:58schemes like

00:59:58MMM has

00:59:59not disappeared.

01:00:00The very

01:00:01idea of a

01:00:02funded pension

01:00:03may inspire

01:00:04distrust.

01:00:05A survey

01:00:06conducted by

01:00:06KMIS,

01:00:07commissioned by

01:00:08Case Ukraine,

01:00:09gives a very

01:00:10interesting picture.

01:00:11In 2021,

01:00:1368.5% of

01:00:15respondents

01:00:16believe that it

01:00:17is the state

01:00:17and the

01:00:18government that

01:00:19should provide

01:00:19for people

01:00:20in old age.

01:00:21And only

01:00:2118.8%

01:00:23placed this

01:00:24responsibility

01:00:24on themselves.

01:00:26But at the

01:00:26same time,

01:00:27among those

01:00:27who placed

01:00:28responsibility

01:00:28for the

01:00:29well-being of

01:00:30pensioners on

01:00:30the state,

01:00:31more than

01:00:32a quarter,

01:00:3226.5%

01:00:34and 0.4%

01:00:36would like

01:00:37to pay less

01:00:38into the

01:00:39pension fund

01:00:39and save

01:00:40this money

01:00:40on their own.

01:00:41That is,

01:00:42society does

01:00:43not reject

01:00:43the very idea

01:00:44of personal

01:00:45savings.

01:00:45The demand

01:00:46is for the

01:00:46state to

01:00:47guarantee them

01:00:47minimum protection,

01:00:48but at the

01:00:49same time,

01:00:49people do

01:00:50not want

01:00:51all the

01:00:51money they

01:00:52pay to

01:00:52simply disappear

01:00:53into the

01:00:54general pool.

01:00:54So the

01:00:55state must

01:00:56create a

01:00:57system where

01:00:58a person can

01:00:58see their

01:00:59own account,

01:01:00knows how

01:01:01much has

01:01:01been deposited,

01:01:02who manages

01:01:03the money,

01:01:04what it is

01:01:04invested in,

01:01:05what fee

01:01:06the fund

01:01:06pays,

01:01:07and what

01:01:08capital can

01:01:09be received

01:01:09in the

01:01:09future.

01:01:10Therefore,

01:01:11the funded

01:01:11pension system

01:01:12should be

01:01:12built on

01:01:13trust and

01:01:14transparency.

01:01:15The reform

01:01:16must follow

01:01:17firm principles

01:01:17that people

01:01:18can understand.

01:01:19Gradually

01:01:20raise the

01:01:20retirement age

01:01:21and the

01:01:21required years

01:01:22of service.

01:01:22Younger

01:01:23generations

01:01:23should be

01:01:24transferred to

01:01:25a system

01:01:25with mandatory

01:01:26personal savings.

01:01:27The government

01:01:28should help

01:01:28fund pensions

01:01:29for generations

01:01:30caught in the

01:01:30transition.

01:01:31Pay for the

01:01:32transition using

01:01:32income from

01:01:33well-managed

01:01:34state-owned

01:01:35assets.

01:01:36Gradually

01:01:37reduce the

01:01:37tax burden

01:01:38on labor

01:01:38and encourage

01:01:39voluntary savings,

01:01:40for example,

01:01:42with tax breaks,

01:01:43as it works

01:01:43in Norway.

01:01:44At the

01:01:45same time,

01:01:46build a

01:01:47regulated

01:01:47stock market

01:01:48where these

01:01:48savings can

01:01:49be invested

01:01:50without the

01:01:51risk of

01:01:51looting by

01:01:52politicians

01:01:52or corporations.

01:01:55Conclusions

01:01:57The Ukrainian

01:01:58pension problem

01:01:59didn't start

01:01:59yesterday.

01:02:00Its foundation

01:02:00was laid back

01:02:01at the beginning

01:02:02of independence,

01:02:02when Ukraine

01:02:03inherited the

01:02:04Soviet

01:02:04pay-as-you-go

01:02:05pension system,

01:02:06and after so

01:02:06many years,

01:02:07still has not

01:02:08formed a

01:02:08full-fledged

01:02:09system of

01:02:09long-term

01:02:10pension savings.

01:02:11Today,

01:02:11this problem

01:02:12has only been

01:02:12exacerbated.

01:02:13Demographic

01:02:14aging,

01:02:15low incomes,

01:02:16shadow

01:02:16employment,

01:02:17labor migration,

01:02:18and after

01:02:192022,

01:02:21large-scale

01:02:21demographic

01:02:22losses,

01:02:23and forced

01:02:24migration.

01:02:24What do

01:02:25countries do

01:02:26where the

01:02:26pension system

01:02:27works better?

01:02:27They try not

01:02:28to put all

01:02:29their eggs

01:02:29in one

01:02:30basket.

01:02:31Part of

01:02:31the future

01:02:31pension is

01:02:32formed through

01:02:32government

01:02:33payments.

01:02:33Part is

01:02:34accumulated

01:02:34by the

01:02:35person and

01:02:35the employer.

01:02:36The funds

01:02:37are invested

01:02:38in profitable

01:02:38assets and

01:02:39generate income.

01:02:41This is a

01:02:41fundamental point

01:02:42that is

01:02:43practically absent

01:02:43in Ukrainian

01:02:44public perception.

01:02:45The most

01:02:46underestimated

01:02:46advantage of

01:02:47switching to

01:02:47a funded

01:02:48pension system,

01:02:49which politicians

01:02:49and populists

01:02:50won't tell you

01:02:51about,

01:02:51is that you

01:02:52don't just

01:02:52set aside

01:02:53your pension

01:02:53under the

01:02:54mattress.

01:02:54If contributions

01:02:55are invested

01:02:56over several

01:02:56decades,

01:02:57they can not

01:02:57only retain

01:02:58their value

01:02:58but also

01:02:59grow.

01:03:00Preserved.

01:03:01If a person

01:03:02passes away,

01:03:03these funds

01:03:03are transferred

01:03:04to their

01:03:04family.

01:03:05By the way,

01:03:05in our survey,

01:03:06almost half

01:03:07of the respondents

01:03:07consider it fairer

01:03:09to have a

01:03:09system in which,

01:03:10in the event

01:03:10of premature

01:03:11death,

01:03:12contributors

01:03:12have the right

01:03:13to pass on

01:03:13their accumulated

01:03:14funds as an

01:03:15inheritance.

01:03:16The pay-as-you-go

01:03:17pension pillar

01:03:18can remain a

01:03:18basic state

01:03:19guarantee,

01:03:20but alongside it,

01:03:21occupational and

01:03:22personal retirement

01:03:23savings should also

01:03:24be developed.

01:03:25At the same time,

01:03:26the state must

01:03:26create conditions

01:03:27under which these

01:03:28funds can be

01:03:28invested in the

01:03:29stock market to

01:03:30generate long-term

01:03:31income instead of

01:03:32constantly burdening

01:03:33the budget.

01:03:33These conditions

01:03:34include the rule of

01:03:35law and protection

01:03:36of property rights,

01:03:37eliminating the

01:03:38presumption of guilt

01:03:39for taxpayers when

01:03:40businesses have to

01:03:41prove to the tax

01:03:42and customs

01:03:42authorities that

01:03:43they are not

01:03:43breaking the law

01:03:44rather than the

01:03:45other way around,

01:03:46and so on.

01:03:46This will

01:03:47simultaneously create

01:03:48future pensions for

01:03:49people and domestic

01:03:50capital for the

01:03:51economy.

01:03:52And this is already

01:03:53a fundamentally

01:03:54different economic

01:03:55model, which

01:03:55should become a

01:03:56priority in the

01:03:57post-war recovery

01:03:58of Ukraine, and

01:03:59it is worth starting

01:04:00to change it today.

01:04:02Do you still rely

01:04:03on state pension

01:04:04payments, or do

01:04:05you think that a

01:04:05person should

01:04:06personally take

01:04:07responsibility for

01:04:08their old age?

01:04:09Write in the

01:04:10comments, your

01:04:10opinion is important

01:04:12to us.

01:04:13Friends, we have

01:04:15an ambitious goal

01:04:16to reach 200,000

01:04:18subscribers on the

01:04:19channel by the end

01:04:20of 2026.

01:04:22You might be

01:04:23watching us for a

01:04:24long time and not

01:04:25even realize that

01:04:26you haven't

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01:04:30Subscribe to our

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01:04:33friends about it.

01:04:34Also, leave a like

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01:04:37this video.

01:04:39We thank all the

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01:04:47prosperity and

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01:04:49Because we are not

01:04:50just making videos,

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01:04:53voters who will

01:04:53choose real reformers.

01:04:55Help us with this.

01:04:56The link to support

01:04:57the price of the state

01:04:58is in the description.

01:05:00The video was created

01:05:02by the Center for

01:05:02Socioeconomic Research

01:05:04Case Ukraine with the

01:05:05support of the

01:05:06Askold and Deer

01:05:07Foundation, administered

01:05:08by Isar Ednanya, within

01:05:10the framework of the

01:05:11Strong Civil Society of

01:05:12Ukraine project, the

01:05:14driving force of

01:05:14reforms and democracy

01:05:16funded by Norway and

01:05:17Sweden.

01:05:18The content of the video

01:05:19is the responsibility of

01:05:21Case Ukraine and does

01:05:22not reflect the views of

01:05:23the governments of

01:05:24Norway, Sweden, or

01:05:25Isar Ednanya.

01:05:26Isar Ednanya.

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