Roman Semenukha: The government has no real strategies for solving the problems of the Pension Fund

The Cabinet of Ministers has come up with a new way of correcting its mistakes at the expense of taxpayers – through the Pension Fund of Ukraine.

“Despite the fact that the parliament, at the insistence of the government, has increased the budget deficit of the Pension Fund from 139 to 150 billion hryvnias, the Pension Fund still lacks money to cover its expenses,” said Roman Semenukha. “In July of this year, when there was this much talked about delay of pensions, we made calculations, which made obvious the following fact – the rate of collecting the unified social tax is unsatisfactory; with such a speed, by the end of the year, the UST plan will not have been implemented.”

Then the government assured us: UST revenues are uneven, there are cash gaps. But there is no reason to talk about the shortage.

Six months have passed. As of December 29, 2018, according to the State Treasury, 228 billion hryvnias were collected out the planned 240.9 billion. That means that the annual shortage amounts to almost 13 billion hryvnias.

According to the Pension Fund’s data, in 2018, loans in the amount of UAH 89.5 billion were taken, while only UAH 84.7 billion were paid back. The problem is that under the law, the Pension Fund had to repay its debts by the end of the year.

“But the government came up with a way to covertly, through these loans, finance those Pension Fund expenditures that had arisen because of the governments’ poor policies,” commented Roman Semenukha. “The Cabinet obliged the State Treasury to lend funds to the PF despite the latter’s debts. So it turns out that the Pension Fund has the right not to repay these loans by the end of the year, as it was necessary until now. In other words, now the Fund has the right to simply take money from the state in the amounts it wants.”

This is stated in the Decree No. 1115 of 14/11/2018, which was published and then removed from the website of the Cabinet of Ministers, but which is valid from 22/12/2018

“This means that the Cabinet of Ministers does not really have strategies that could actually solve the problem of the increasing Pension Fund deficit. Moreover, the Cabinet does not plan to look for solutions and implement them either,” said the MP.

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