The Ukrainian government has announced a plan to introduce a mandatory funded pension system, which should improve the pension provision of citizens. Also according to the report of the "Sudovo-Yurydychna Gazeta", the new system provides for a monthly deduction of part of the income to the individual accounts of Ukrainians, which will later become an additional source of income in retirement.
The Ministry of Social Policy presented the draft law "On Mandatory Funded Pension Provision", which provides for the introduction of mandatory payments to state or non-state pension funds for both employees and employers.
The bill provides for a reduction in the Unified Social Contribution: from 22% to 17% in the first year, to 16% in the second, and to 15% from the third year.
The mandatory severance contribution for employees will be 1% of the accrual base in the first year, 2% in the second, and 3% in the third year. Employees will also be able to pay an additional severance contribution in similar proportions.
For employers, the mandatory savings contribution will be 1% in the first year, 2% in the second year, and 3% in the third year. From the fourth year, if the employee pays an additional contribution, the employer allocates part of the single contribution to the savings contribution.
Self-employed individuals also have to pay savings contributions.
Failure to pay or late payment of contributions will be punishable by a fine of 20% of the amount not paid on time.
