Changes in pension provision will come into force in July next year.
Pensions in Ukraine are planned to be calculated in a new way.
As part of the pension reform in Ukraine, it is planned to introduce points depending on the number of years of work and the amount of pension contributions paid. This was announced by the Minister of Social Policy Oksana Zholnovych at the Global Digital Social Forum.
“We want to make changes that would show a very simple mechanism for calculating and paying pensions. After all, people always talk about two criteria: the number of years I worked and the number of contributions I paid. And this should be the basis for how this pension is calculated,” she said.
Zholnovich explained that these two criteria are planned to be included in the points that will be summed up for each month of work of the citizen. Upon reaching retirement age, the person will have a set of points that will be converted into a percentage of the average salary in Ukraine.
“Because this is the most relevant category that shows the reality of funds. What we all, as Ukrainians, earn within the average salary is the amount that we, as Ukrainians, live on in a given year. And therefore, this will be the fairest format for paying and accumulating our solidarity pension contributions,” the minister emphasized.
According to the Ministry of Social Policy, the changes in pension provision will come into force in July next year.
The new pension legislation combines three key components: solidarity pension, funded pension, and voluntary pension savings.
“The combination of solidarity and accumulative systems will ensure the replacement of 60% of a person's earnings during their lifetime, which will contribute to increasing the financial stability of citizens after retirement,” the ministry reported.
It was previously reported that the pension calculation system may change in Ukraine in the near future. The new system will take into account both the number of years worked and the amount of monthly contributions made by the citizen.
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