Reforming State Pension and Social Insurance Funds as a Direction for Optimising the State’s Financial Resources

Abstract

The scientific article examines the process of reforming state pension and social insurance funds as an important direction for optimising the state's financial resources amid modern socio-economic and military challenges. It is substantiated that the growth of social expenditures, the dispersion of financial flows across different funds, the insufficient level of coordination between them, as well as limited control over the targeted use of funds, have necessitated transforming the social insurance system. Special attention is paid to the influence of demographic, socio-economic and military factors on the functioning of the state pension and social insurance system as a whole. The prerequisites and consequences of the institutional reform, which provided for the liquidation of the Social Insurance Fund of Ukraine and the transfer of its functions to the Pension Fund of Ukraine, are described. It is established that such integration contributed to the formation of a consolidated model of state pension and social insurance administration, which allows reducing administrative costs, optimising financial resources and strengthening control over their use. The mechanisms of centralisation of financial flow management, digitalisation of processes and introduction of electronic services are analysed. It is emphasised that such an integrated model aligns with European practices for managing social insurance systems. At the same time, it was revealed that there is a regulatory inconsistency between the provisions of the Law of Ukraine «On Compulsory State Social Insurance», which provides for the functioning of the social insurance fund as a separate entity, and the actual organisational model that has developed after the reform. It is proven that the current state of legal regulation should be considered as a transitional stage that requires further harmonisation of legislation. It was determined that the priority of further reform should be the optimisation of financial resources based on their consolidation with the social insurance fund in case of unemployment, with the expansion of digitalisation tools for the management of social public funds.