DISINFO: The IMF forces Ukraine to cancel pensions
SUMMARY
Cooperation with the International Monetary Fund (IMF) is leading Ukraine towards the abolition of the pension system. The Kyiv regime promised to transfer the pension system to a “cumulative” format. Given the total political and economic instability, this will mean the actual abolition of pensions in the country. The economic course imposed on Kyiv leads to the complete destruction of the Ukrainian economy.
RESPONSE
Recurring pro-Kremlin disinformation narrative accusing the West of the war in Ukraine. The narrative also aims to undermine Ukraine’s cooperation with the International Monetary Fund.
Despite Russia's war against Ukraine, the country will not cancel social spending. Payments of pensions and social benefits are a priority for Ukraine. The Government of Ukraine has repeatedly emphasized that payments of pensions, salaries, as well as financing of education, medicine and the military sector are protected expenditure items of the Ukrainian budget, which are carried out on time and in full.
At the same time, Ukraine, together with the International Monetary Fund, plans to continue the reform of the country’s pension system. This is stated in the Memorandum of Economic and Financial Policy with the IMF dated March 22, 2024 (page 95).
The pension reform in Ukraine provides for the transition to a funded pension system. The funded pension depends on the salary of the employee, who contributes a percentage of the salary to an individual pension account. An employee has the opportunity to choose a private pension fund or several funds where he places his savings. This model of pension provision works successfully in a number of developed countries.
At the moment, Ukraine has a pension system based on the principle of generational solidarity. This means that working Ukrainians finance the pensions of those who have already finished their working career.
The IMF noted the successes of the Ukrainian economy during the war period. According to the IMF, the Ukrainian leadership during the war avoided hyperinflation, preserved foreign exchange reserves, ensured the smooth functioning of the banking system, maintained financial stability and protected priority payments. In particular, this concerns social benefits that have been and will be paid to Ukrainians on time and in full.
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