Draft law on pension reform: how the pension system in Ukraine will change

The Ministry of Social Policy of Ukraine has published a draft law related to pension reform, which is currently being discussed on the website of the SPO of trade union associations. The main goal of this document is to increase the fairness and adequacy of pensions in the solidarity pension system.

In particular, the draft law provides for significant changes in the pension calculation mechanism. Thus, it is proposed to use information on the amount of paid insurance contributions, not the salary from which these contributions were paid, to calculate the pension. In addition, the maximum amount of the pension will not be limited, which will make it possible to pay out larger amounts to those with significant insurance contributions.

One of the key innovations is the introduction of a basic pension, which will replace a complex and non-transparent system of additional payments and "extensions" of a non-status nature. The basic part of the pension will provide a minimum level of pension security for persons who have reached pensionable age.

Basic pension and points system

According to the draft law, the amount of the old-age pension will consist of the basic pension and the insurance part, which will be determined on the basis of points. Each point will depend on the amount of insurance contributions paid by the person and the ratio of these contributions to the average salary in Ukraine. The cost of one point will be determined by the Cabinet of Ministers, taking into account the average salary and the number of points that a person will acquire over 35 years of experience.

Another important change is the possibility of granting a pension to persons who have reached the age of 65, even if they do not have sufficient insurance experience, but have paid contributions equivalent to the sum of contributions for 30 years.

This draft law aims to ensure greater transparency of the pension system and reduce discrimination among persons who cannot accumulate enough insurance experience due to various circumstances.

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