IMF tells Ukraine to tackle pricey pension system
The International Monetary Fund (IMF) chief in Ukraine told Kiev Tuesday that its pension system was unsustainable because it supported nearly a third of the population and must limit the number of retirees.
The IMF has long pressed Ukraine to tackle its budget-draining social welfare program for retired workers, as part of a broader overhaul that could get future lending from the West back on track.
The issue has emerged as the number one stumbling block to the former Soviet nation receiving future aid.
"The discussion of pension system reforms has been delayed for too long," Ukraine's IMF mission Chief Ron van Rooden told the Ukrainska Pravda news website. Ukraine is clawing its way out of a deep two-year recession that was fanned by heavy spending on fighting a Russian-backed eastern separatist insurgency in which Kiev's big industries fell into rebel hands. But, the country needs foreign financial help to repay outstanding loans and pursue an economic policy that could temper inflation while achieving sustainable growth. The Ukrainian government has strongly resisted raising its pension age, which now stands at 57 for women and 60 for men, because the measure is detested by voters who have already seen many of their social benefits cut.
Yet van Rooden said the pension system remained a considerable concern because it supported 30 percent of the population and was operating at a loss.
A memorandum signed between Kiev and the IMF requires parliament to adopt pension system enhancements by the end of the month. But the chamber is now in recess and will not resume work until May.
The IMF has long pressed Ukraine to tackle its budget-draining social welfare program for retired workers, as part of a broader overhaul that could get future lending from the West back on track.
The issue has emerged as the number one stumbling block to the former Soviet nation receiving future aid.
"The discussion of pension system reforms has been delayed for too long," Ukraine's IMF mission Chief Ron van Rooden told the Ukrainska Pravda news website. Ukraine is clawing its way out of a deep two-year recession that was fanned by heavy spending on fighting a Russian-backed eastern separatist insurgency in which Kiev's big industries fell into rebel hands. But, the country needs foreign financial help to repay outstanding loans and pursue an economic policy that could temper inflation while achieving sustainable growth. The Ukrainian government has strongly resisted raising its pension age, which now stands at 57 for women and 60 for men, because the measure is detested by voters who have already seen many of their social benefits cut.
Yet van Rooden said the pension system remained a considerable concern because it supported 30 percent of the population and was operating at a loss.
A memorandum signed between Kiev and the IMF requires parliament to adopt pension system enhancements by the end of the month. But the chamber is now in recess and will not resume work until May.