Borysiuk, Candidate of Economic Sciences, Associate Professor of Finance, Lesya Ukrainka Volyn National University, Lutsk, Ukraine

ORCID ID: 0000-0002-9411-4118
e-mail: lena-borysuk@ukr.net

Datsyuk-Tomchuk, Candidate of Economic Sciences, Associate Professor of the Law and Finance Department, Lutsk Institute of Human Development, University of Ukraine, Lutsk, Ukraine

ORCID ID: 0000-0002-9794-8943
e-mail: mashaprof@ukr.net

A. Zvirko, student of the Faculty of Economics and Management, Lesya Ukrainka Volyn National University, Lutsk, Ukraine

ORCID ID: 0000-0001-7776-4461
e-mail: nastasia.09.nz@gmail.com

I. Demchuk, student of the Faculty of Economics and Management, Lesya Ukrainka Volyn National University, Lutsk, Ukraine

ORCID ID: 0000-0001-8244-2491
e-mail: Irademchuk04@gmail.com

The Role of Non-State Pension Funds in Ensuring the Socio-Economic Development of the Country

Abstract. Introduction. With the constant growth of the deficit in the financing of pension benefits and the real threat of the state’s inability to guarantee pensions, the role of the private pension system is growing. The burden on the state pension system leads to an increase in the financial burden for individuals and legal entities, due to increased contributions to the state Pension Fund, which leads to a decrease in the amount of financial resources for the development of its activities.

Purpose. The purpose of the article is to analyze the activities of private pension funds in the current socio-economic development of the country.

Results. The effective functioning of the national economy depends on the level of financial security of various economic entities. With the help of mobilization of their funds, there is an active distribution and redistribution of financial resources between different sectors of the economy. A developed system of financial institutions is needed to develop the process of accumulation of free money. They are the ones who transfer capital from those who have savings and those who need it. Among many types of financial institutions, private pension funds deserve considerable attention. Given the practical absence of a funded system of compulsory state pension insurance, as well as the insufficient level of funding for the solidarity system, they contribute to improving the economic well-being of the population. By concluding an agreement with the NPF, each citizen can determine the amount of future additional non-state pension benefits. Thus, without the effective functioning of the third level of the pension system, the financial security of the population in old age will be minimal, which will reduce the economic development of Ukraine as a whole.

Conclusions. For the effective functioning of the NPF network in Ukraine, it is necessary:

• ensure transparency of NPF activities and increase protection of the rights of their participants;
• to establish a fund for guaranteeing pension contributions of participants, which would return part of such contributions in case of bankruptcy of the selected NPF. This would increase public confidence in these financial institutions;
• to improve and modernize the regulatory framework related to NPF risk management;
• take measures to improve the financial literacy of the population and increase public interest in participating in the private pension system;
• reduce the taxation of payments to NPF participants when they reach retirement age;
• provide tax benefits for legal entities – founders of NPFs, with a significant number of participants;
• to ensure the development of the financial market in Ukraine, which will expand the range of financial instruments in which NPFs can invest.

Keywords: pension system; non-state pension provision; non-state pension funds; corporate pension funds; pension payments; socio-economic development.

References:

1. Ministry of Justice of Ukraine (2022). Official web-site. Retrieved from https://minjust.gov.ua/m/str_4816 [in Ukr.].
2. Verkhovna Rada of Ukraine. (2021). About non-state pension provision (Act No.1057-IV, July 1). Retrieved from https://zakon.rada.gov.ua/laws/show/1057-15#Text [in Ukrainian].
3. Tkalich, O. I. (2012). Foreign experience of the legal status of non-state pension funds. Naukovi zapysky L’vivs’koho universytetu biznesu ta prava, 8, 46-49. Retrieved from http://nbuv.gov.ua/UJRN/Nzlubp_2012_8_14 [in Ukrainian].
4. Rippa, M. & Shymko, Ya. (2019). The economic nature of non-state pension fumds. Ekonomichnyj visnyk universytetu, 41, 162-170. Retrieved from https://doi.org/10.31470/2306-546X-2019-41-162-170 [in Ukrainian].
5. National Commission on Securities and Stock Market. (2021). Results of development of the non-state pension system as of 30.09.2021. Retrieved from https://www.nssmc.gov.ua/news/insights/#tab-5 [in Ukrainian].
6. Tanchyk, V. I. & Hrushko, V. I. (2019). Current state and prospects of development of non-state pension funds in Ukraine. Zbirka dopovidej na Mizhnarodnij konferentsii Derzhava, rehiony, pidpryiemnytstvo: informatsijni, suspil’no-pravovi, sotsial’no-ekonomichni aspekty rozvytku [State, regions, entrepreneurship: information, socio-legal, socio-economic aspects of development]. Kyiv: KROK University, 369-371. Retrieved from https://library.krok.edu.ua/media/library/category/materiali-konferentsij/grushko_0010.pdf [in Ukrainian].
7. Barr, Nicholas & Diamond, Peter A. (2008). Reforming Pensions. MIT Department of Economics Working Paper, 08-22, 3-6. DOI: http://dx.doi.org/10.2139/ssrn.1315444 [in English].
8. National Bank of Ukraine (2017). Official web-site. Strategy of the Corporate Privat Pention Fund of the National Bank of Ukraine, 2017-2022. Retrieved from http://nbuv.gov.ua/UJRN/Nzlubp_2012_8_14 [in Ukrainian].
9. Verkhovna Rada of Ukraine. (2010). Tax code of Ukraine (Act No.2755-VI, Desember 2). Retrieved from https://ibuhgalter.net/tax-codex/159 [in Ukrainian].
10. Open Pension Fund «PrivatFund» (2022). Official web-site. Retrieved from https://privatfond.com.ua/uk/ [in Ukr.].
11. Open Pension Fund «Dynastia» (2022). Official web-site. Retrieved from https://ibuhgalter.net/tax-codex/159 [in Ukr.].
12. Non-state Pension Fund «OTP Pensiia» (2022). Official web-site. Retrieved from https://otppension.com.ua/ [in Ukr.].
13. Institutionell. (2020). Das sind die größten Pensionskassen in Deutschland. Retrieved from https://www.private-banking-magazin.de/kapitalanlagen-das-sind-die-groessten-pensionskassen-in-deutschland/ [in German].
14. IKZE. (2022). IKZE w Dobrowolnych Funduszach Emerytalnych. Retrieved from https://konto-ikze.pl/ [in Polish].
15. OTP Nyugdíjpénztár (2022). Official web-site. Retrieved from https://www.otpnyugdij.hu/hu/uj-belepoknek [in Hungarian].