New pensions: Ukrainians to receive three types of payments – media
25 January 16:28
Ukrainians will receive three pensions instead of one in the future. The Cabinet of Ministers is already working on the reform.
This was announced by Minister of Social Policy, Family, and National Identity Denys Ulyutin in an interview with RBC-Ukraine, according to "Komersant Ukrainian".
The idea is to divide the payments into three components:
- a solidarity system,
- special pensions,
- a cumulative part.
Currently, according to Ulyutin, even with the same length of service and salary level, Ukrainians receive different pensions. The three-tier system is intended to correct this and balance the situation.
Solidarity pension
The solidarity pension should depend on contributions to the solidarity system. With this approach, for example, the pension of a teacher with 40 years of service will increase by about one and a half to two times.
“The more a person has worked, even at an average salary, the more they will receive a normal pension in the end. And it will be significantly higher than it is now,” he said.
There may also be a basic payment to cover the needs of those who do not have sufficient insurance experience.
“It will be determined by the budget for the relevant year and, ideally, should provide a basic subsistence minimum,” said Ulyutin, adding that the current subsistence minimum of 2,595 hryvnia is not realistic.
Professional (special) pension
According to the Cabinet’s plan, existing special pensions will remain, but they will not be paid from the solidarity system.
“You can retire early if you have preferential seniority, but you will not receive anything from the solidarity system until the general retirement age. Payments will only be made from the professional part,” the minister added.
According to him, conditions must be created where both professional and general seniority are taken into account.
“In fact, we do not count the years spent in the profession, but the amount of money you have paid during this time. We are moving to a different approach to forming pensions. A pension is what you have earned,” the minister stressed.
It will take at least 13 years to convert special pensions into professional pensions, if we start in 2026 or even 2027 .
Accumulative pension
The third element of the reform is a voluntary cumulative pension. This part should not be mandatory.
For example, starting in 2027, you can start making contributions to a cumulative fund in addition to the unified social tax (UST) paid into the solidarity system.
“You can opt out of this. But this will result in your pension being lower,” Ulyutin explained.
