UKRAINE - Ukraine's pension reform law - which must make it past the speaker of the parliament before the president can approve it - could be put to a vote again later this year, pension experts have said.
 
According to Lydia Tkachenko, analyst at the Institute of Demography and Social Studies of National Academy of Sciences, it is still unclear whether the law will get final approval, as the reform faces stiff opposition.
 
"The law was adopted by the parliament on 8 July," she said. "However, this law has not been signed by the speaker of the parliament, and it has not been passed to the president.
 
"It is possible that the law as a whole or some of its articles would be put to vote again in September."
 
She added: "Several pension reforms have been discussed since the 1990s in Ukraine. While the majority of post-communist countries have adopted new measures over the last decade, Ukraine has not introduced any reform yet."

The current pension reform, which aims to implement a second pillar and extend the legal retirement age to 60 years for women (instead of 55) and 63 for men (instead of 60), has been widely criticised.

Earlier this year, president Viktor Yanukovych said the pension reform would be "very difficult", but that a bill had already been prepared for its implementation.

The introduction of the pension reform is one of the conditions imposed by the International Monetary Fund (IMF) to pay the next $1.5bn (€1bn) tranche of a $15bn lending package.

Both the IMF and the World Bank have put pressure on the country to reduce its surging pension spending, which currently makes up 18% of GDP.

The government is now seeking to implement new measures, including a second pillar and the extension of the legal retirement age.

However, several experts have argued that the introduction of a second pillar - which will be based on a compulsory and personalised accumulative system - would be unnecessary over the short term.

In a report published in February this year, Ukrainian think tank Institute for Economic Research and Policy Consulting and the German Advisory Group on Economic Reforms said they did not consider the introduction of a second pillar to be even a mid-term priority of the government.

They added: "The experience of some countries during the crisis indicated that such systems are highly exposed to risks.

"The pension reform should start with changes in the pay-as-you-go system. Only after it becomes sustainable should the government start thinking about introduction of the second pillar of the system."

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