THE MAIN CHARACTERISTICS, FEATURES AND SHORTCOMINGS OF THE INVESTMENT STRATEGY OF THE NON-STATE PENSION FUNDS IN UKRAINE

Abstract

Reform of the pension system in Ukraine is a key challenge for Ukrainian society, taking into account its economic, social and demographic role. Unfinished pension reform does not guarantee appropriate level of life for retirees, creates pressure on governmental budget and, respectively, slows down the pace of economic growth. One of the elements of the modern pension system, which does not function effectively, is its third level – non-state pension funds. They have not become a popular alternative to state pension for over twenty years of existence. It causes the need to study the reasons for such situation. Of course investment strategy and investment performance of the funds are among such reasons. The goal of the article was to study the features of the investment strategy of the non-state pension funds in Ukraine and define the factors which influence its efficiency. It was discovered that investment strategy of the non-state pensions funds is quite conservative and inflexible, what is caused by the realities of a national economy, the level of development of the local financial market and existing legislation. Legal requirements to the investment strategy of NPF are really strict comparing to the other countries, including the developing states. The specified factors may testify about the need to revise the investment strategy of NPF in Ukraine in the context of increase of its flexibility and adequacy to the existing conditions. The following research in the given direction should include analysis of correlation between investment performance of NPFs and the level of development of financial markets, analysis of the different investment strategies’ profitability, and approbation of the other countries’ experience, which a similar to Ukraine in their social, economic and demographic character, to the investment performance of the local non-state pension funds.