Pension indexation in a new way: what the government is preparing from July 2025
7 July 22:19
In July 2025, as part of the pension reform, the Ukrainian government prepared changes to the pension indexation procedure to ensure unified approaches for all categories of recipients: from working pensioners to recipients of special pensions. This was stated by the Minister of Social Policy Oksana Zholnovych, "Komersant Ukrainian" reports.
The Ministry of Social Policy has proposed to abolish the separate linkage of special pensions (for example, for the military, by automatic recalculation according to employees’ salaries) and introduce uniform indexation rules for all categories of pensioners.
Indexation will be at the level of inflation, without reference to salary growth, which will eliminate significant differences in performance among different groups of pensioners.
“When we bring the calculated pension to the level of inflation, we update and modernize it, but according to the same standards and rules,” Zholnovych explained.
According to the analysis of the Ministry of Social Policy, there are three sources of such distortions:
- Reduced retirement age for certain categories.
- Relaxed requirements for length of service.
- Re-indexation of pensions above the general level of salary replacement (up to 70-90% versus about 40%).
After pensions are calculated, they will be indexed to inflation rather than changes in wages. There will no longer be any separate “retirement formula” for special categories.
It is worth noting that indexation has been automatic every year since March 1, 2025: the last index was 11.5%, which led to an increase in pensions by UAH 100-1,500. A direct comparison with the new mechanism will allow us to move from quarterly recalculation to a long-term stable methodology.
The Ministry expects that the unification of indexation will simplify administration, make it predictable and predictable. In addition, pensioners of older age groups will be able to receive fair payments in accordance with general rules, rather than outside the conditions of fairness.
At the same time, the removal of the linkage of special pensions to wages could reduce their growth, which would have a positive impact on the financial pressure on the budget.
