Institutional imbalances and regulatory gaps of the pension system of Ukraine: features and consequences

Анотація

The article analyses Ukraine’s pension system with the aim of identifying and assessing institutional imbalances and regulatory gaps that determine its financial instability and low social effectiveness. The author addresses the permanent crisis of the solidarity level of the pension system caused by demographic challenges, the shadowing of the labour market, and institutional inertia in implementing of accumulation mechanisms. It has been established that institutional imbalances manifest themselves in functional asymmetry between the declared social goals of the pension system and the actual instruments for their implementation. The main gaps include insufficient diversification of funding sources, fragmentation of the legislative framework, the existence of special pension regimes, and the underdevelopment of the accumulation levels of the national pension system. The consequences of these imbalances have been identified, manifesting in the rapidly growing trend of the number of pensioners exceeding the number of insured persons, the chronic growing deficit of the Pension Fund, and the low replacement rate of lost earnings (pensions). Particular emphasis is placed on the institutionally unjustified differentiation in pension provision: it has been established that preferential pensions granted under specific laws (in particular, for judges, prosecutors, civil servants, etc.) significantly exceed the average level of payments provided in accordance with the Law of Ukraine “On Compulsory State Pension Insurance”. This practice leads to a critical increase in social inequality among pensioners and undermines public confidence in the long-term pension outlook. The article systematically identifies the conceptual pitfalls of Ukrainian pension reform and the formulation of proposals to improve the institutional foundations of a three-tier pension system capable of ensuring the adequacy and sustainability of pension payments in conditions of economic turbulence.

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