Pension reform, NABOO and the launch of the land market: the conditions of cooperation with IMF

For cooperation with the IMF Ukraine needs to fulfill several conditions.

This is stated in the published text of the Memorandum with the IMF, writes “Interfax”.

Pension reform

Pension reform in Ukraine should be adopted by the Verkhovna Rada until the end of April 2017. According to the published text of the Memorandum, the pension reform, which must be taken before the end of may 2017, shall enter into force on 1 January 2018.

Reform should include a new list of options retirement with a broader range of retirement age compared to the present one, offering the citizen the choice of time and conditions of retirement that are dependent on the General seniority. In addition, it is necessary to introduce additional pension payments for stimulating longer employment of citizens and later their retirement.

According to the Memorandum, the reform should promote savings of at least 3% of GDP in the long term, including by increasing the actual years of service (seniority) at retirement. In the schedule annexed to the Memorandum declared that the average effective age of retirement in Ukraine is 58.5 years for men and 55.9 years for women, whereas the EU average is 63.5 years and 62.5 years respectively.

According to the IMF, the pension reform providing increase of pension age in Ukraine, will provide employees additional incentives to defer retirement and, therefore, limit the possible reduction of the workforce, but this point by the Memorandum is not provided.

The Minister of social policy of Ukraine Andriy Reva said that we are not talking about raising the retirement age, but only about the plans for 10 years to eliminate the deficit of the Pension Fund. He noted that we are talking about the introduction of the opportunity to continue labour activity after reaching retirement age by increasing the size of pensions for those citizens who retire later than the statutory deadline.

“The General retirement age is 60 years, but if you want to have a great retirement, then you are working”, — said the Minister.

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The national anti-corruption Bureau of Ukraine (NABU) until the end of may 2017 is supposed to teach the right to remove the information from channels of communication and investigation undercover. According to the text of the Memorandum published on the IMF website on Tuesday, the previous deadline for this condition is the end of November 2016 – have not been met and a new deadline defined by the end of may 2017.

Thus, the legislative changes must be submitted to the Verkhovna Rada and adopted by the end of may (it is defined benchmark of cooperation with the IMF) to ensure the opportunity for the NAB to use a wide range of investigative techniques without having to rely on the infrastructure of other departments, including: undercover operations, intercepting communications, accessing computer systems and control of correspondence.

In addition, the Memorandum provides that the registration of pre-trial cases and decisions of investigative judges relating to the NAB, must be protected from leakage of information related to ongoing investigations by restricting access to officers of the NAB and Special anti-corruption Prosecutor’s office (SAP) as long as the investigation has not been completed or closed.

The Memorandum pointed out that by the end of December 2016, the NAB hired the employee 542 of 700 people a complete package and opened 3 regional offices.

The NAB has demonstrated its ability to conduct investigations against high-ranking officials, in particular 8 members of Parliament, 39 judges, 23 of the Prosecutor. In cooperation with the pad 40 cases were sent to court and led to the abolition of untouchability a member of Parliament. The NEB should also continue to publish statistics concerning the investigations into acts of corruption by high-ranking officials on his page in free access.

See also:

After receiving the loan from the IMF, the national Bank will cancel the portion of foreign exchange restrictions


A bill to run the land market

The IMF expects approval by the Verkhovna Rada of the draft law to launch a land market in may of this year, as well as the lifting of the moratorium on sale of agricultural land from the end of 2017.

“The approval by the Verkhovna Rada of the law on turnover of agricultural land is expected before the end of may 2017 (amendment and new deadline for execution of structural lighthouse, which remains from the end of September 2016), which will allow the current moratorium on sale of agricultural land to lose force as of the end of 2017”, — stated in the text of the Memorandum between Ukraine and the IMF.

We will remind, on April 3 the Board of Directors of the International monetary Fund decided to allocate Ukraine one billion dollars.

Ukraine has already received from the IMF under a new extended credit programme 7.7 billion dollars. The last installment was in September of 2016, when Kiev received $ 1 billion.

Overall, the program signed in the spring of 2015, for four years, and the total amount of the loan amount to $ 17.5 billion.

Earlier, the head of the NBU Valery Gontareva said that in spite of the delay of the fourth tranche, the baseline scenario provides for four tranches of the IMF in the amount of $ 5.4 billion in 2017.