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Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert

During years of independence, Ukraine’s pension system has been tooled to secure bureaucracy’s cozy existence in old age

23 November, 1999 - 00:00

The Labor and Social Policy Ministry’s recent statistic eloquently testifies to the formation of a new Ukrainian elite, this time among the pensioners. And this is at a time when 95% of those living in retirement are below the poverty line. The said elite is made up of retired officers and men of the Internal Affairs Ministry, jobholders, prosecutor’s office employees, judges, customs officials, Chornobyl survivors, and former lawmakers. Most others are left out, among them veterans of labor and World War II as well as victims of Communist purges.

RETIRED ELITE

In all Eastern and Central European countries with transition economies, systems of “priority payments” are gripped by severe crisis. Ukraine is no exception, of course, as the existing pension system leave everybody frustrated, ranging from government employees to pensioners proper. Citizens spend a lifetime earning an adequate retirement, only to discover that the amount due them depends primarily on one’s occupation, whether one was a boss or among those conferred so many meaningless “merits”.

After the 1992 abolition of “personal pensions” [plush retirement allowances due Soviet nomenklatura veterans —Ed.] it seemed that Ukrainian pensioners had received equal rights and money. Then seven years passed, and the retired found themselves divided into eleven categories all with different pensions.

Under the Soviets, the largest personal pension equaled an average pay received by “workers engaged in the national economy.” Today, certain pensioners are paid 4-5 times and more than ten times over the average government old-age allowance. Over the years of independence the domestic bureaucracy has tooled the dying “solidarity” pension system to secure its own cozy existence in old age. There are pension systems for state officials at 500 hryvnias a month; those for retired servicemen, Internal Affairs officers, prosecutors, and judges, 200-600 hryvnias, and up to 600 hryvnias for onetime People’s Deputies. In fact, certain categories are legally appointed over 1,000 hryvnias.

However, there is also another side to the coin. Hungry pensioners are easier to manipulate. In other words, when pensions and time of payments depend on the state, pensioners automatically turn into an obedient herd.

(See page ECONOMY/FINANCE)

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