Eggs in profile: how the government plans to replace special pensions with “professional pensions”
21 August 09:43
The Cabinet of Ministers of Ukraine is preparing another large-scale pension reform, which should radically change the principles of calculating and paying pensions in the country. The government’s action program envisages the creation of a fundamentally new model of the pension system. This is stated in the material of the Judicial-legal newspaper, reports "Komersant Ukrainian".
Key elements of the future reform
The central idea of the reform will be the introduction of a “predictable” pension system with three main components. First, it is planned to establish a clear mathematical link between the unified social contributions paid, the period of their payment and the final amount of pension payments.
Second, it is planned to fundamentally change the system of special pensions, which will be transformed into occupational pension programs. According to the government’s plan, this means that instead of the current system, where a person can choose only one type of pension, citizens will be able to receive payments simultaneously from different pension systems. Whether this means that the actual pensions of judges and prosecutors will increase, the government did not say.
The third element of the reform will be the introduction of a mandatory funded component of pension provision, which should supplement the existing solidarity system.
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Changes for civil servants and judges
Particular attention is paid to reforming pensions for representatives of certain professions, in particular, judges and prosecutors. Minister of Social Policy Denys Ulyutin explained that the new system provides for payments in three components: basic, variable and professional components from different sources of funding.
The head of the Verkhovna Rada’s social committee, Halina Tretyakova, expressed her position on the need to unify the retirement age for all categories of citizens. According to her, representatives of the judiciary, like all other Ukrainians, should retire by age, not by length of service. At the same time, the difference should be in the income replacement rate, which for judges should be sufficient to ensure their independence.
Timeframe for implementation
The implementation of the reform is designed for several stages. By September 2025, the Parliament should receive draft laws on the payment of pension arrears of retired judges. By the end of next year, key bills on funded pensions and occupational pension programs are scheduled to be presented.
Concrete results of the reform should become visible as early as 2026, when five million Ukrainians will receive pensions of at least four thousand hryvnias due to improved accrual mechanisms.
Systemic changes and prospects
The program also provides for solving the problem of the state’s legal obligations in the field of pension provision. It is planned to develop a unified approach to the recalculation of special pensions through the mechanism of annual indexation, which should eliminate existing imbalances in the system.
The reform of the solidarity pension system will include improvements in mechanisms for calculating pensions and accounting for pension rights, which should make the system fairer and more predictable for citizens, the government says.
These changes mean a transition from a fragmented system with numerous exceptions to a single, logically constructed model of pension provision, which will take into account both the principles of social justice and the economic sustainability of the state, the Cabinet of Ministers assures.
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