NON-STATE PENSION FUNDS AS AN INSTRUMENT FOR STRENGTHENING SOCIAL PROTECTION AMID SYSTEMIC RISKS OF UKRAINE'S PENSION SYSTEM

Abstract

Introduction. Ukraine's pension system is at a point of structural instability, driven by the simultaneous action of demographic, financial, institutional, and military risks. The replacement rate declining to 24.1% in 2025 (against the ILO minimum of 40% and the OECD average of 52%), the Pension Fund's financial dependence on budget transfers (~36% of revenues), and the critical underdevelopment of the NPF market (assets < 0.1% of GDP) generate a systemic demand for a conceptual reorientation of pension policy.

Purpose. The paper aims to comprehensively investigate the systemic risks of Ukraine's pension system and the role of non-state pension funds in their mitigation, and to substantiate an original problem-solution matrix for NPFs as an institutional instrument of social protection.

Materials and methods. The information base comprises NSSMC, PFU, UAIB, and State Statistics Service data for 2020–2025; the OECD report on the sustainability of the Ukrainian pension system (2024); the Accounting Chamber Report "PFU Sustainability under Martial Law" (2024); Draft Law No. 9212 (2023); and the KSE Institute sociological survey (2024). Methods of systems analysis, risk-oriented approach, comparative analysis, logical synthesis and forecasting were applied.

Results. An original typology of systemic risks of pension provision across five groups is developed: demographic, financial, institutional-regulatory, behavioural, and military. The PFU's chronic dependence on budget transfers (~36% of revenues in 2025) and the structural deformation of the NPF market (43% of assets concentrated in one fund, decline in NPF numbers from 62 to 49 over 2020–2025) are identified as interrelated manifestations of systemic dysfunction. An original 'problem–solution–effect' matrix for five directions of NPF reform is proposed with quantitatively justified parameters.

Discussion. Future research should focus on actuarial modelling of the consequences of introducing a mandatory second pillar and on assessing the fiscal effects of expanding the system of incentives for voluntary pension savings in the post-war recovery context.