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LAW OF UKRAINE

of July 9, 2003 No. 1057-IV

About non-state pension provision

(as amended on 19-06-2020)

This Law determines legal, economic and organizational basis of non-state pension provision in Ukraine and regulates the legal relationship connected with this type of activity.

Section I. General provisions

Article 1. Determination of concepts

1. In this Law of concept are used in the following value:

the administrator of non-state pension fund (further the administrator) - the legal entity performing administration of non-state pension funds on the terms of this Law;

the annuity - the periodical retirement benefits performed with the established time intervals until will not come some event determined in the relevant agreement yet;

open pension fund - non-state pension fund which members can be any physical persons irrespective of the place and nature of their work;

the investor of non-state pension fund (further - the investor of fund) - person paying pension contributions for benefit of the participant by money transfer to non-state pension fund in accordance with the terms of the pension contract and the law;

equity - difference between aggregate value of assets of the legal entity and cost of its obligations to the third parties;

activities on non-state pension obespecheniyusovokupnost of the organizational, legal and other stipulated by the legislation acts directed to implementation of non-state pension provision of physical persons;

activities for asset management - the professional activity determined by the legislation on the capital markets and the organized goods markets;

life pension (lifelong annuity) - the retirement benefits performed by insurance company based on the insurance contract of life pension during life of physical person periodically after achievement of retirement age by it according to the legislation on insurance;

the founder (founders) of non-state pension fund - the legal entity or physical persons (for the professional pension fund) who created the pension fund or joined it after creation and acquired the rights and obligations determined by this Law for founders of the pension fund;

the keeper of the pension fund (further - the keeper) - the National Bank of Ukraine or bank which based on the corresponding license performs activities for storage of assets of the pension funds;

the investment declaration - the document determining investment policy of non-state pension fund, the main directions and restrictions of investment of assets of non-state pension funds according to this Law;

the individual retirement account - the personalized count of the member of the pension fund which is kept in system of the personified accounting in the procedure determined by this Law for the purpose of accounting of the pension means which are saved up for benefit of the participant;

the company on asset management - the legal entity performing professional activity on asset management based on the corresponding license for carrying out such activities;

corporate pension fund - non-state pension fund which founder is legal person employer or several legal persons employers and which employers payers can join;

the non-state pension fund (further - the pension fund) - the legal entity created according to this Law who has the status of the non-profitable organization (not entrepreneurial society) functions and performs activities only for the purpose of accumulating of pension contributions for benefit of members of the pension fund with the subsequent management of pension assets, and also performs retirement benefits to members of the specified fund in the procedure determined by the laws of Ukraine;

the non-state pension fund - the subject of the second level of system of provision of pensions - non-state pension fund which is created and is effective according to the legislation on non-state pension provision, meets the requirements of this Law for receipt of the license for provision of services in accumulative system of pension insurance (further - the pension fund - the subject of the second level);

unit of pension assets - indicator of system of the personified accounting which is applied to determination of the amount of pension means which belong to the member of the pension fund and are considered on its individual retirement account in the pension fund;

lump retirement benefit - the retirement benefit performed one-timely according to the procedure and in the cases determined by this Law;

retirement benefit - the money payment to the participant of non-state pension provision or to its heirs performed at the expense of the money which is saved up in non-state pension fund and considered on the individual retirement account in the cases provided by this Law;

pension scheme - the document determining conditions and procedure for non-state pension provision of members of fund;

the pension contract - the contract between the pension fund and its investor according to whom non-state pension provision of the participant (participants) of fund for certain pension scheme is performed;

pension assets - the assets of the pension fund, insurance company, bank institution created according to this Law at the expense of which retirement benefits are performed;

retirement deposit accounts - the supplementary (deposit) accounts of physical persons opened by bank institutions taking into account the conditions established by the legislation for accumulating of savings on pension payment;

pension means - the amount of monetary commitments of the pension fund before his participants, insurance company before insured persons according to insurance contracts of life pension or bank institution before the investors who opened retirement deposit accounts;

pension for certain term - the retirement benefits performed periodically during certain term according to the procedure and in the cases determined by this Law;

the personified accounting - collection, processing, systematization and storage stipulated by the legislation about provision of pensions and this Law of information on participants of non-state pension provision, data on determination of their rights to retirement benefits at the expense of the means which are saved up in their advantage and also for calculation of the amount of these payments;

the paragraph of the twenty eighth is excluded

the paragraph the twenty ninth is excluded

the paragraph the thirtieth is excluded

the professional pension fund - the pension fund, the founder (founders) of which can be organizations of employers, their consolidation, consolidation of citizens, the labor unions, their associations or physical persons connected by the nature of their professional activity (occupations) determined in the fund charter. Exclusively physical persons connected by the nature of their professional activity (occupations) determined in the fund charter and also physical persons who are employees of the organizations of employers, their associations, members or employees of labor unions, their associations which created such fund can be members of such fund;

reserve fund - the fund created according to the legal acts of Ukraine regulating activities of economic societies taking into account requirements of this Law the administrator, the company on asset management for the purpose of indemnification which can be put with these legal entities during provision of services to the pension fund as a result of inadequate accomplishment of obligations to the pension fund and violation of the legislation by them;

the employer - the owner of the company, organization, organization irrespective of pattern of ownership, type of activity or the body authorized by it or physical person which according to the legislation uses wage labor;

the employer - the payer of corporate pension fund (further - the employer payer) - the employer recognizing the charter of already created corporate pension fund which showed willingness to list money for benefit of the workers in such fund based on the agreement signed by it with council of this pension fund;

self-regulatory organization of administrators of non-state pension funds - the non-profitable organization (not entrepreneurial society) created for the purpose of establishment of professional standards of activities for administration of non-state pension funds, to protection and representation of interests of the members, and also members of non-state pension funds;

insurance company - the insurer who obtained the license for life insurance;

the participant of accumulative system of pension insurance - the physical person which pays insurance premiums in accumulative system of obligatory national pension insurance and made the decision on the direction of these pension fund contributions - the subject of the second level according to the procedure, established by the Law of Ukraine "About obligatory national pension insurance";

the participant of non-state pension provision - physical person for benefit of which are paid pension contributions in the pension fund or into the retirement deposit account in bank and which has the right to non-state pension provision on conditions and according to the procedure, determined by the pension contract, the agreement on opening of the retirement deposit account or the insurance contract of life pension and this Law or which receives retirement benefits from the pension fund (were paid);

the member of the pension fund (further - the member of fund) - physical person for benefit of which are paid pension contributions in the pension fund and which has the right to retirement benefits or receives such payments from the pension fund according to this Law (were paid);

net value of unit of pension assets - estimated cost of unit of pension assets which is determined by division of net value of assets into total quantity of units of pension assets on the date of calculation. Net value of unit of pension assets is estimated according to the procedure, established by the National commission on securities and the stock market. Net value of unit of pension assets on the date of receipt of the first pension contribution in the pension fund is established in the amount of 1 hryvnia;

net value of assets of the pension fund - difference between asset cost of the pension fund on the date of carrying out calculation and the amount of obligations of the pension fund which are subject to accomplishment on the date of carrying out calculation.

2. The terms "controller", "control", "affiliate" and "connected person" are used in the values given in the Law of Ukraine "About financial services and state regulation of the markets of financial services".

Article 2. System of non-state pension provision

1. The system of non-state pension provision is the component of system of accumulative provision of pensions which is based on the principles of voluntary participation of physical persons and legal entities except the cases provided by the laws in forming of pension accruals for the purpose of receipt of non-state pension provision by participants of retirement benefits, additional to obligatory national pension insurance.

2. Subjects of non-state pension provision are:

non-state pension funds;

insurance companies which signed insurance contracts of life pension with members of fund, risk insurance of approach of disability or the death of the member of fund;

the bank institutions which signed contracts on opening of retirement deposit accounts;

investors and members of the pension funds participants of accumulative system of pension insurance;

investors of retirement deposit accounts;

participants of non-state pension provision;

founders of the pension funds;

employers are payers of corporate pension funds;

self-regulatory organizations of the subjects rendering services in the sphere of non-state pension provision;

the paragraph the eleventh is excluded according to the Law of Ukraine of 12.09.2019 No. 79-IX

administrators of the pension funds;

the companies on asset management;

keepers;

auditors;

persons rendering consulting and agency services according to this Law.

3. Non-state pension provision is performed:

the pension funds by the conclusion of pension contracts between administrators of the pension funds and investors of such funds according to this Law;

insurance companies by the conclusion of insurance contracts of life pension with members of fund, risk insurance of approach of disability or the death of the member of fund according to this Law and the legislation on insurance;

bank institutions according to this Law and the legislation on banking activity by the conclusion of agreements on opening of retirement deposit accounts for accumulating of pension savings within the amount determined for compensation of deposits by Fund of guaranteeing household deposits, established according to the law.

Article 3. Legislation on non-state pension provision

The legislation on non-state pension provision consists of this Law, the legislation on obligatory national pension insurance, the laws of Ukraine "About insurance", "About banks and banking activity", "About institutes of joint investment", "About the capital markets and the organized goods markets", "About state regulation of the capital markets and the organized goods markets" and other regulatory legal acts adopted according to this Law.

Article 4. Principles of non-state pension provision

1. Non-state pension provision is performed on the principles:

legislative determination of conditions of non-state pension provision;

interest of physical persons in non-state pension provision;

voluntariness of creation of the pension funds by legal entities and physical persons, associations of physical persons and associations of legal entities;

voluntary participation of physical persons in system of non-state pension provision and the choice of type of retirement benefit, except the cases provided by this Law;

voluntariness of adoption by the employer of the decision on implementation of pension contributions for benefit of the workers in system of non-state pension provision;

economic interest of the employer in implementation of pension contributions for benefit of the workers in system of non-state pension provision;

impossibility of unreasonable refusal of the employer of implementation of pension contributions in system of non-state pension provision for benefit of the workers if the employer began implementation of such pension contributions;

equality of all members of the pension fund who are taking part in one pension scheme;

differentiation and department of assets of the pension fund from assets of other subjects of non-state pension provision and accumulative pension insurance for the purpose of protection of property rights of members of the pension fund and exception of possibility of bankruptcy of the pension fund;

determinations of the size of retirement benefit depending on the amount of the pension means considered on the individual retirement account of the member of fund or insured person;

guaranteeing to physical persons of realization of the rights granted to them by this Law;

target and effective use of pension means;

state regulation of the size of rates for the services rendered in system of non-state pension provision;

responsibility of subjects of system of non-state pension provision for violation of the regulations provided by this Law and other regulatory legal acts;

state regulation of activities for non-state pension provision and supervision of its implementation.

Article 5. Audit inspections in the sphere of non-state pension provision

1. Scheduled audit inspections of activities of the pension funds, administrators, the companies on asset management, keepers, the insurance companies and banks rendering services in the sphere of non-state pension provision are carried out at least once a year at the expense of the checked legal entities. Results of audit inspections are subject to publication according to the procedure, determined by this Law.

2. Audit inspection is carried out by the auditor who has the right to carrying out auditor activities and is engaged only in rendering auditor services according to the legislation.

Audit inspection is carried out according to the legislation based on the agreement which is signed between the auditor and the checked legal entity.

The same auditor cannot perform two and more legal entities rendering services to the same pension fund. The auditor cannot perform subjects of non-state pension provision and the above-stated legal entities if he or his founder (founders) own share (share, shares) in the authorized capital of these subjects (legal entities) or their founder (founders).

The national commission on securities and the stock market of Ukraine establishes requirements to the auditors performing audit of legal entities - subjects of non-state pension provision.

3. The administrator and the company on asset management submit to the National commission on securities and the stock market the annual financial reporting together with the audit report (the report of the auditor).

Section II. The non-state pension provision performed by the Pension funds

Article 6. Non-state pension funds and their types

1. The pension funds are created based on the decision of the founder (founders) and do not aim at profit earning for benefit of the individual founder or for its further distribution between founders.

2. Non-state pension provision is exclusive type of activity for the pension funds. Implementation by the pension funds of other activities which are not provided by this Law is forbidden.

3. Assets of the pension fund are created for the contributory pension account (pension contributions) and other receipts in the pension fund.

4. By types the pension funds can be formed as open pension funds, corporate pension funds and the professional pension funds.

The pension funds are forbidden to change their type and the name specified in the charter of the pension fund after inclusion in the State register of financial institutions by the National commission on securities and the stock market.

5. Accession and merge of several pension funds of one type is allowed. In case of merge or accession of several pension funds of one type the neogenic pension fund (fund to which accession is performed) shall be the same type, as funds which merged or joined.

The cession of property, the rights and obligations of the pension fund is forbidden to others, than non-state pension funds to legal entities - legal successors in connection with the termination of the pension fund by merge or accession.

The termination of the pension fund by separation or transformation to other type of the pension fund is forbidden.

Features of carrying out accession and merge of the pension funds are established by the National commission on securities and the stock market.

6. The pension fund has own name in which shall be specified type of fund, words "non-state pension fund" or "pension fund" and which differs from names of any other pension funds created in the territory of Ukraine.

Words "non-state pension fund" and "pension fund" cannot be used in names of the legal entities created not under this Law, except for uses of words "pension fund" by the Pension fund of Ukraine and its bodies, and also the companies, organizations and the organizations which are in management of the Pension fund of Ukraine.

7. Governing bodies of the pension fund are the meeting of founders and council of the pension fund (council of fund).

Creation of other governing bodies of the pension fund is forbidden.

8. The pension fund for ensuring the activities uses services of persons determined by this Law based on the relevant contracts which are signed with these persons council of fund. The pension fund shall use services in administration only of one administrator.

9. The pension fund cannot assume liabilities which are not connected with activities for non-state pension provision. The pension fund does not bear responsibility according to obligations of the third parties and has no right to transfer the obligations to participants and investors of fund to the third parties, except the cases provided by this Law.

10. The pension fund does not bear responsibility according to obligations of the state, and the state does not bear responsibility according to obligations of the pension fund that it is specified in each pension contract.

11. The budgetary institution has the right to be founder of corporate pension fund or to perform pension contributions in already created pension funds only if creation of such funds or implementation of pension contributions is provided by the laws of Ukraine, decisions of the Cabinet of Ministers of Ukraine or decisions of the relevant local councils. The organization is forbidden by such budgetary institutions of open pension funds. The funds transferred in any pension fund by any investor are not property of the state or local government bodies.

12. The pension fund cannot be declared the bankrupt and is liquidated by the legislation on bankruptcy. Procedure for creation, functioning and liquidation of the pension funds, and also features of their registration as financial institution are determined by this Law.

Article 7. Participants and investors of non-state pension funds

1. The paragraph one is excluded.

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