The Government of Ukraine Proposes a Point Pension System: How This Will Change Payments.

According to ТСН: In Ukraine, the government is planning to abandon the old methods of pension calculation and introduce a new European point system. This new model aims to solve an important problem: the significant gaps in pension payments between 'new' and 'old' pensioners.

How will points be calculated?

The current pension calculation system looks like this: $P = Zp × Kz × Ks$, where the average salary, earnings coefficient, and work experience are taken into account. The new system is much simpler: each month, an employee will earn points depending on their salary compared to the national average.

• 10 points — if your salary equals the average in Ukraine.

• 20 points — if you earn twice as much as the average.

• 5 points — if your salary is half the average.

At the end of a working career, all accumulated points are summed up and multiplied by the current value of one point.

Why is this beneficial: fairness for all generations

The current system has a significant drawback — outdated payments. A pensioner who retired in 2015 receives significantly less than a colleague with a similar experience who retired in 2025. This is because the average salary in the old formula 'freezes' at the moment of retirement.

Advantages of the point system:

1. Automatic updating: The value of a point is reviewed annually for everyone at the same time.

2. Equalization of payments: The pensions of 'old' pensioners will rise to the modern level of salaries.

3. Transparency: Every employee will be able to see how many points they have accumulated and assess possible future payments independently.

When to expect implementation?

Initially, the launch of the reform was planned for 2025. However, under conditions of martial law and budget deficit, the exact timing of implementation remains a topic of discussion in the Government and the Verkhovna Rada. Currently, the development of the legislative framework is ongoing, which is supposed to replace the existing system of solidarity payments.

The introduction of the point pension calculation system could be an important step towards fairer pension provision for different generations. Against the backdrop of economic challenges, the question of reforming the pension system is gaining new momentum, and the success of this initiative is crucial for the well-being of millions of Ukrainians in the future.