ABSTRACT
Ukraine has seen a significant aggravation of social problems, resulting from a continuous decline in output. All relevant government agencies are aware that effective changes in pension support cannot be implemented without dramatic reforms. About 22 million citizens are employed in Ukraine’s national economy, but as many as 14 million people are receiving pensions from the Pension Fund. Ukraine’s payroll taxes of 52 percent in 1994 were among the world’s highest and they pose a heavy burden on enterprises, even when they were reduced to 37 percent in 1999, they continued to constitute a major burden on payrolls. Pensions alone account for a payroll tax of 32.56 percent. The Draft Basic Legislation on Social Insurance has been considered for years. This legislation contains pension insurance, unemployment insurance, and, in the future, medical insurance. Ukraine has created the necessary administrative arrangements, but financial arrangements and management are needed.
