Ukraine is preparing a large-scale pension reform: the government wants to change the system of calculating benefits

In Ukraine, a large-scale pension reform may be introduced in the fall, which should change the principle of pension formation and reduce the gap between minimum and maximum payments. The government has already presented the corresponding concept to the Verkhovna Rada.

This was reported by MP Olga Vasylevska-Smaglyuk.

According to her, the new model provides for a two-component pension system. The pension will consist of a basic part, which will be financed by the state, and an insurance part – its size will depend on the length of service and contributions paid.

One of the key areas of the reform will be the gradual transfer of special pensions to the system of professional pension programs. The government expects that this will allow for more active development of voluntary accumulation mechanisms.

The Cabinet of Ministers also plans to change the internal mechanism for distributing funds in the pension system in order to avoid rapid depreciation of payments after a person retires.

“By introducing the basic part, they expect to eliminate the effect when the payment significantly depreciates three years after retirement. At the same time, new pensioners receive significantly higher payments for similar length of service and salaries,” Vasilevska-Smaglyuk noted.

In turn, the head of the parliamentary Committee on Social Policy, Halyna Tretyakova, named five main tasks of the upcoming reform.

Among them:

increasing the income replacement rate to 40–60% of wages;

regulating the pension provision of mobilized servicemen;

unifying the retirement age;

introducing a accumulative system for occupational pensions;
creating a accumulative component for employees with increased salaries.

The reform will also take into account the requirements of the European Union directives on the modernization of the pension system.

At the same time, the basic document that will determine the level of pension payments in 2026 remains the Law of Ukraine “On the State Budget of Ukraine for 2026”. It is it that establishes the amount of the minimum pension, the possibilities of indexation and the amount of financing of the Pension Fund.