Ruslan Magomedov on the role of non-state pension funds in pension reform

The pension system in Ukraine consists of three levels: a solidarity state pension, a mandatory cumulative pension (which is currently being prepared for implementation) and a voluntary pension through non-state pension funds (NPFs). It is the third level that has been in operation in our country for many years.

What is the situation surrounding pension reform and the role of NFPs in it? Ruslan Magomedov, Chairman of the NSSMC, gave his remarks on this matter in an interview with the YouTube channel Minfin.

He explained that contributions to a non-state pension fund are the property of the contributor for life, regardless of changes in employment, termination of contributions, or moving abroad. The key task of such a system is to preserve the purchasing power of the funds contributed by minimizing the impact of inflation.

Activity of these funds is regulated by strict requirements and is monitored by the Commission to ensure maximum security for savings made by citizens.

According to Ruslan Magomedov, one of the key problems for NPF management companies today is who to find reliable investment instruments.

In view of this, the Commission proposes to attract investment in reliable corporate bonds and stimulate the development of the stock market by listing on the stock exchange a part of shares of successful state-owned companies. This will create necessary investment opportunities and attract long-term funds into the country’s economy.

As an example of successful reform, Ruslan Magomedov cited pension reform in Poland, which contributed not only to financial stability but also to economic growth, job creation, and increased budget revenues. Even though the Ukrainian context is different, some parts of the Polish model could be adapted for Ukraine.