Non-state pension provision in the EU and Ukraine: development challenges, institutional trust and the risk of fraud

Анотація

Introduction. Demographic changes, particularly population ageing, as well as financial imbalances in the pay-as-you-go pension system, necessitate the development of funded pension schemes. In EU countries, non-state pension funds play a significant role in ensuring the financial stability of the pension system and in generating long-term investment resources. For Ukraine, it is crucial not only to implement the best practices of EU countries in this area, but also to establish institutional conditions that foster trust and protect pension savings. Problem Statement. The development of non-state pension provision in Ukraine is hampered by low household incomes, limited employer participation, insufficient diversification of investment instruments, and a lack of trust in financial institutions. An additional constraining factor is the perception of risks associated with non-transparent asset management and fears of potential fraudulent schemes, which are exacerbated by the population’s relatively low level of investment and financial literacy. The purpose is to provide a comprehensive analysis of European practice regarding the operation of non-state pension provision, including institutional mechanisms to ensure the transparency of non-state pension funds and to prevent abuse and financial fraud, as well as to identify opportunities for adapting these practices to the Ukrainian context. Methods. The study employs general scientific methods (analysis and synthesis, induction and deduction, generalisation), comparative analysis to contrast European and domestic approaches, as well as normative analysis to assess EU regulatory practices in the field of pension provision and the protection of participants’ rights. Results. It has been established that the effective functioning of non-state pension systems in EU countries is ensured by a combination of financial incentives (co-financing of contributions, tax relief), institutional mechanisms (automatic enrolment, separation of asset management functions) and a high level of transparency (personalised access to information, digital services). At the same time, significant attention is paid to fraud prevention through enhanced supervision, disclosure standards and financial education for the public. In Ukraine, the non-state pension system remains underdeveloped and requires institutional strengthening. Conclusions. The development of the non-state pension system in Ukraine should be based on a combination of European practices, taking into account national characteristics, including improving financial literacy, strengthening regulatory oversight and introducing mechanisms to protect against fraud. This will help to strengthen trust in pension institutions, reduce the burden on the pay-as-you-go system and generate long-term investment resources for economic development.

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