Many decades ago, at the dawn of its existence, the pension system had one single goal – to reduce poverty. But even in the XXI century in many countries pension provides less and less "dignified old age." The situation is typical for Ukraine and for Europe. That's why it's time to talk about the current problems of pension systems of the Old World. Today, pension systems have ceased to work properly from the point of reducing the number of poor people. They turned into a structure that allows you to distribute income throughout the life cycle of the income received for work, move on in life after the end of the activity itself. At the same time the number of employees decreased and the number of retirees grows. Need more contributions from the working population, which causes dissatisfaction and a shift to obtain shadow income.

Thus, the traditional solidarity pension system is already unable to cope with its mandated functions. As it turned out, these same systems can not operate in a highly life expectancy and low fertility, because they were designed when there was a reverse situation. In other words, many workers previously shared manufactured product with a few retirees, but in our time vice versa. In general, the traditional pension system can be likened to a pyramid scheme, which produces nothing, but generates high profits. Older participants will receive payments from contributions by new members. While number of new members who join the scheme exceeds the number of old, the scheme can provide higher profits for the older members, and all is going well.