The role of private pension funds state regulation development in Ukraine

Abstract

In order for the state to effectively perform its functions, a solid regulatory and legal framework should be established to regulate the activities of private pension funds and an effective system of private pension funds state regulation in Ukraine should be built. Such regulation should contribute to the development of financially sustainable pension funds, as well as to ensure control over the assets diversification in order to prevent high riskiness of operations, which may cause a loss of pension savings.
The purpose of the article is to study the structuring of state bodies regulating the activities of private pension funds, their functionality and regulation specifics. On this basis the types of private pension funds with the definition of regulatory characteristics of the latter in Ukraine are systematized.
In the article the author examines an aggregate of state regulatory bodies of the private pension funds activities and institutions that manage the funds. The inefficiency of the existing distribution of powers to oversee the activities of private pension funds among regulators, taking into account the specifics of state control and regulation of these institutions activities, has been proved. Key areas for regulating the activities of private pension funds have been identified, namely: regulation of the institutional form of funds and their management structure; regulation of the financial activities of the funds; regulation of investment portfolio structure of funds by establishing quantitative restrictions on the part of some financial assets in the portfolio of funds. The features of building a system of non-state pension provision in Ukraine are considered. The domestic pension system was investigated with regard to its three levels – the joint system of compulsory state pension insurance, the accumulative system of compulsory state pension insurance and the system of non-state pension provision. The types of private pension funds with the definition of regulatory characteristics of the funds in Ukraine are systematized.
In modern conditions, the role of state regulation of private pension funds activity is primarily to create a favourable external environment for the operation of funds by improving the legal framework of their activities, applying special tax policies, encouraging employees and employers to participate in non-state pension provision, introduction of prudential supervision over the activities of the funds.