Today at the Government’s meeting the Prime Minister Volodymyr Groysman has presented the draft law “On amendments to some laws of Ukraine on increase of pensions “, and described the main aspects of the future pension system. The new system should be triggered after approval of the Verkhovna Rada starting October 1, 2017.
According to the draft there to be provided the introduction of common rules for pension accounting. For “old” and “new” pensioners there will be applied a new formula of pensions accounting – using the average wage rate at a level of 3764.40 UAH. Previously, this rate depended on the year the pension was accounted and ranged from 1197.91 UAH to 3764.40 UAH.
In order to reduce the deficit of the Pension Fund, there will be established new requirements for the duration of the pension insurance record. Previously the minimal employment period for pension assignment was 15 years, now it is planned to increase it to 25 years. However, the retirement age remains 60 years.
There will be introduced a flexible corridor for retirement age. All people who lack the minimum employment period will be able to pay for the missing years but not more than five years.
Also, the Government offers to abolish the special conditions for retirement, leaving the possibility only for the military service men. In particular, it is planned to change the pensions refund mechanism for employees who have the right to old-age pension on preferential terms, so that the employer will pay increased rates of the social security tax of 15 and 7%. Lists of such employees will be expanded and implemented starting January 1, 2019, through the Accumulative Pension Fund of professional pension saving schemes for certain categories of people under the age of 35.
Also, the revocation of right for long service pension accounting including workers of academic, health care, social protection and other spheres will take place starting January 1, 2018.
The Cabinet of Ministers suggests abolishing restrictions on a scale of pensions for working pensioners (85% of the pension scale, but not less than 150% of the minimum living wage for disabled people).
According to the draft law on pensions increase it is planned to ensure an annual automatic indexation of pensions for protection against inflation.
During the meeting, the Government approved a bill on the proposed amendments and submitted it to the National Reform Council for further consideration.
Source: The Cabinet of Ministers