Pension reform announced in Ukraine: who will receive 60% of their salary.

The government plans to introduce a pension reform in Ukraine starting from July 1, 2025. The main principle of the reform is to introduce a cumulative component into the solidarity pension security system. This was reported by TSN.

Minister of Social Policy Oksana Zholnovich stated that this reform will allow citizens to receive a pension at a level of no less than 60% of their income, which complies with European standards. 'This will contribute to an increase in pensions for all citizens depending on the size of their social contributions and experience,' she noted.

According to the reform, part of the social contribution will be directed to the personal cumulative accounts of employees.

The Ministry of Social Policy has developed a draft law that envisions the phased introduction of the cumulative system starting from January 1, 2026. According to this plan, contributions will be collected from social contributions and income tax, starting at 1% in the first year and gradually increasing to 3%.

President of Ukraine Volodymyr Zelensky stated that all current pensions will be paid in full. However, expert Lydia Tkachenko from the Institute of Demography and Social Studies forecasts an increase in pension amounts during March 2025 by 10-12%.

The draft law also provides for the possibility of citizens making voluntary contributions to their cumulative accounts to increase their future pensions.

Moreover, the requirements for the minimum work experience to receive a pension will increase. To receive a pension at the age of 60, one must have at least 32 years of experience, at the age of 63 - from 22 to 32 years, and at the age of 65 - a minimum of 22 years of experience.

Currently, in Ukraine, the minimum pension is 2361 UAH for those without the necessary experience, and the average pension is 5816 UAH as of July 1, 2024, according to the Pension Fund. Compared to European Union countries, the pension amounts vary significantly - from 3000 euros in Luxembourg to 300 euros in Bulgaria.

It is also important to note that the accumulated funds in the cumulative accounts will be invested to protect against inflation and to increase citizens' pension savings. According to the new draft law, Ukrainians will have the opportunity to make additional voluntary contributions to their cumulative accounts to enhance their pensions.