Non-state pension provision – is the only way to guarantee oneself a respectable pension.
Unfortunately state is not capable to provide a dignified level of life to pensioners. The matter is that the pensions are paid at the expense of the money charged to the Pension Fund of Ukraine by working people. These funds are not enough for decent pensions because:
• There are 70 citizens of Ukraine who are not able to work for 100 of those who are able to work.
• There are unemployed citizens of Ukraine who are able to work.
• There are some discounts for charges to the Pension Fund of Ukraine for some categories of the employees
• There is a tendency of ageing people (i.e. the quantity of pensioners relative to working people is increasing) and the prognoses for the future are not satisfying.
Thus, the state neither at present, nor in the observable future is able to increase the real rate of pension provision. A person should care about the dignified life on retirement by himself and he should start thinking about it as soon as possible.
Non-state pension provision – is advantageous mean of making savings for the following reasons:
• Non-state pension is paid in addition to the state one. Presence and the size of non-state pension does not affect the amount of a state pension.
• Contributions to the non-state pension funds are not taxed on income of individuals within 15% of salary
• Money accumulated on the individual account of a person in non-state pension fund “are working” and are generating investment income.
• Investment income generated by the pension savings is not taxed on income of individuals.
• Only 60% from all the amount of pension payouts that a person will receive from the non-state pension fund after retirement is taxed on income of individuals.
• There is a possibility to inherit retirement savings.
• There are no limits on maximum amount of a pension in non-state pension provision.
• There is a possibility to receive a non-state pension 10 years earlier than state one, or 10 years later – at the moment that is suitable for you. Thus, women may receive a non-state pension at the age of 45 and men at the age of 50. If you want more gain at the expense of investment income, for example, if you are still working, then women may start to receive a non-state pension at an age of 65 years, and men at an age of 70.