Pension at 60% of salary: Ukraine prepares large-scale pension reform.

Minister of Social Policy Oksana Zholnovych revealed the details of the planned comprehensive pension reform in Ukraine.

During the government question hour in the Verkhovna Rada, she announced that the Cabinet is preparing a package of bills, which is planned to be submitted to parliament by the end of 2024, with the aim of updating the country's pension system.

The reform provides for renewing and leveling pensions, especially for those who have been retired for a long Time, to ensure equal conditions in pension provision. An important innovation will be the ability for citizens to independently pay the unified social contribution (USC), which will increase the size of the pension, especially in cases where the employer does not provide a sufficient salary.

The government also resolved the issue of pension payments for people returning from occupied territories. A mechanism for crediting full insurance experience has been introduced, even if the data remained in the occupied territory or in Crimea, which will ensure social protection for this category of citizens.

One of the key elements of the reform is the introduction of a mandatory accumulative pension system, which is to be introduced from 2026. Bills for this package are already ready and will be submitted to the Cabinet for consideration soon. The goal of the reform is to ensure a pension level of at least 60% of the average salary over a lifetime, of which 40% will be provided through the solidarity system, and the rest through the accumulative system.

Zholnovych also announced plans to change the principles of pension calculation, moving away from using the subsistence minimum. Instead, pensions will be calculated based on the average salary in Ukraine and the average salary of each person over a lifetime, which corresponds to European standards.

Zholnovych noted that at least 30 billion hryvnias are needed to successfully launch the reform, and the Ministry of Social Policy, in cooperation with the Ministry of Finance, is looking for the necessary resources. She acknowledged that the current size of social payments is insufficient, but noted that Ukraine depends on financial assistance from international partners who have their own requirements for minimum social standards.

The government is ready to increase social standards if additional resources are available, including frozen Russian funds and other programs totaling 50 billion hryvnias. Zholnovych stressed that the proposed reform meets European standards and aims to improve the standard of living for pensioners in Ukraine, despite difficult economic conditions and wartime challenges.

Earlier, a date for the large-scale pension indexation for Ukrainians was announced, and an increase in payments was reported.