Key points:
- Ukraine plans to introduce a three-tier pension system instead of a single payment.
- Solidarity pensions will depend on contributions paid.
- Special pensions will become part of professional payments and will not be limited to the solidarity system.
- Accumulative pensions allow individuals to save money independently to increase future payments.
- The aim of the reform is to make pensions more equitable.
Ukraine is planning changes to its pension payment system, which will involve a transition from a single universal pension to three separate components. This was reported by the Ministry of Finance.
Minister of Social Policy, Family and National Unity Denis Ulyutin noted that the government is already working on a project that should make pension payments more equitable for millions of Ukrainians.
According to the concept of a three-tier pension system, the main component will be:
- solidarity pension, calculated on the basis of contributions to the solidarity system.
Minimum basic payments may also be provided for people without sufficient insurance experience.
The second component provides for:
- professional (special) pensions, which will not be financed through the solidarity system, but will be formed as a professional part of payments based on contributions paid for the entire length of service.
A third component is also proposed:
- a voluntary accumulative pension, participation in which will not be mandatory, but may increase the amount of future payments.
The transition to a three-tier system should reduce inequalities in pension payments, where people with the same length of service and salary receive different pensions.
It is noted that the government plans to begin implementing certain elements of this reform in the coming years.
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