Applies to everyone. Ukrainians will pay 9% of their salary for a funded pension
The first savings within the funded pension system may begin as early as 2026.
The first savings within the funded pension system may begin as early as 2026.
The pension reform in Ukraine will provide for a mandatory deduction of 9% of salary for a funded pension, Minister of Social Policy Oksana Zholnovych announced during a press briefing on January 27.
According to her, the first savings within the new pension system may begin as early as 2026. The relevant bill is planned to be submitted to the Verkhovna Rada in the coming months.
"We have already conducted the first round of approvals with the central executive authorities. We are now completing the approval of the figures with the Ministry of Finance. I am convinced that the draft law will be submitted to the Verkhovna Rada in the coming months," the minister noted.
She added that this is necessary in order to lay down all the necessary legislative framework and begin technical preparations for the implementation of the reform this year.
As Zholnovych said, under the new system, everyone will be able to count on 20% of their average lifetime salary from the savings fund. Another 20% will be provided by the solidarity system, which will give an overall income replacement rate of 40%. Ukrainians will also be allowed to voluntarily increase the amount of deductions, which will affect future pension payments.
"You voluntarily pay more, so the coverage will be greater. It depends on each person's decision," she said.
The minister emphasized that in addition to the accumulative system, the bill proposes the introduction of new concepts: basic and insurance pensions. The first will be the same for all pensioners and its size will be 30% of the minimum wage after taxes, and the second will depend on the length of service and the level of wages. It is planned to introduce a pension points system for its calculation.
About pension reform in Ukraine
The reform is provided for by requirements from international partners and is mentioned in the Memorandum with the IMF.
The pension reform process in Ukraine should begin by July 2025. The Ukrainian authorities plan to submit changes to pension legislation to parliament by the end of March 2025.
Yes, one of the problems that is planned to be solved is the complexity of the pension system. Ukraine undertakes to refrain from: introducing new special pensions or benefits/adopting any new legislation that would lead to the emergence of additional contingent liabilities related to pensions that are not provided for by financial resources/from changes that would lead to a decrease in the legally established retirement age.
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