The Ministry of Social Policy has published a draft law, which provides for the reform of the solidarity level of the pension system. According to the document, pension payments will consist of basic and insurance components. Accumulated pensions have also been announced.
The Ministry of Social Policy has published a draft law, which provides for the reform of the solidarity level of the pension system. According to the document, pension payments will consist of basic and insurance components. Accumulated pensions have also been announced.
The basic pension will be mandatory and the same for all pensioners, providing a basic level of social protection. Its amount will be 30% of the minimum wage after taxes.
If the pension reform becomes operational in 2025, the amount of the basic pension will be UAH 1,848 (minimum salary — UAH 8,000, and after paying personal income tax and the new military levy — UAH 6,160).
The insurance component will depend on the length of service and salary and will be calculated according to the points system. The calculation of the insurance component within the framework of the reform will be significantly updated: instead of cumbersome formulas, a point system will be introduced, numerous allowances and «extensions» (surcharges so that the amount of payments equals the living wage guaranteed by the Constitution) will disappear, and special pensions will generally be removed «by the brackets» of the solidarity level.
The value of one pension point will be revised every March, depending on the average salary in the country, replacing the traditional indexation of pensions.
The number of their enrollment will depend on the amount of salary. If it is equal to the average official salary in Ukraine (according to the data of the Pension Fund), then a person is awarded 10 points for a month of work.
If the amount of the reward exceeds the average salary in Ukraine, the number of points increases proportionally. And vice versa — if it is smaller, then the points will be proportionally less.
Since it is necessary to have at least 35 years of work experience to take a well-deserved rest, a person who has received an average salary throughout his life will earn 4,200 points. This number will turn into a kind of benchmark that will be used to calculate the value of one point. The minimum number of them, which will give the right to receive payments according to age (with the necessary experience) is 1440 points.
The value of the pension point will be calculated once a year. For this, the product of the average salary for the previous year and the coefficient of 0.3 will be divided by 4200. For example, for 2024, the value of the pension point calculated according to this formula would be approximately UAH 1.02.
In order to calculate the amount of the insurance pension payment, you need to multiply the number of earned points by the value of one.
To retire at the age of 60, it will be necessary to have at least 35 years of work experience. If you have 15 years of experience, you can receive a pension at the age of 65.
Along with this, the state will make it possible to retire to persons who at the age of 65 do not have enough work experience, but have accumulated a certain number of points (about them below).
The draft law provides that changes to the pension system will come into effect on July 1, 2025.
If the plan of the Ministry of Social Policy succeeds, a three-level pension system will work in Ukraine, and in old age Ukrainians will be able to claim payments, the amount of which will exceed half of their salary.
After the reform, the amount of payments to those people who are already retired will be calculated according to the new rules, that is, taking into account the points earned by them in the past. Also, a basic pension will be added to their insurance payment.
Other additional payments — for a certain status of a person or special working conditions — will be withdrawn from the pension system and transferred to the state budget.
It is expected that after the reform, the amount of solidarity pensions will increase for 80% of Ukrainian pensioners. If the pension calculated according to the new rules turns out to be smaller than before, its amount will not be reduced.
Another part of the reform is the introduction of a mandatory accumulation level of the pension system, writes the EP.
A feature of the second level is the individual nature of contributions. If at the solidarity level, payments are made from the «common cauldron», into which contributions are made by citizens of working age, then at the accumulative level, the amount of future payments depends solely on how much a person has saved for old age.
Within the framework of the reform, individual pension accounts will be opened for every working Ukrainian, which will be replenished monthly by employers and the state. The savings fund, which will manage these funds, will invest them in order to protect against inflation and multiply.
Starting from the fourth year, citizens will have the right to transfer their pension savings to the accounts of private companies that are authorized to participate in the second level. These can be non-state pension funds (NPF), life insurance companies or banks. The cumulative level of the pension system is planned to be introduced from January 1, 2026.
