If the bill is passed, Ukrainians will be required to pay an annual funded contribution.
The Ministry of Social Policy has prepared a draft law “On Compulsory Accumulative Pension Provision”.
The text of the draft law has been published on the website of the Federation of Trade Unions of Ukraine and is under public discussion until October 28.
“This Law defines the legal, economic and organizational foundations of the compulsory funded pension provision system, the purpose of which is to form pension savings by system participants and receive pension payments in addition to the compulsory state pension insurance,” the document says.
The bill provides for a gradual transition to funded pensions. In particular, it is proposed to reduce the Unified Social Contribution (USC) rate over three years:
- first year – decrease from 22% to 17%;
- second year – to 16%;
- third year and thereafter – 15%.
At the same time, mandatory payments will be introduced to state or non-state pension funds, which will pay not only employees, but also employers.
The mandatory funded contribution will be 1% of the accrual base in the first year, 2% in the second year. From the third year, this contribution will be 3%. It will be paid by both employees and employers. In addition, employees will be able to pay an “additional savings contribution” if they wish.
Recall that in 2024, Ukrainians have the right to retire after reaching 60, 63 and 65 years of age, depending on the amount of insurance experience acquired. Social assistance is provided for pensioners without sufficient experience.