President approves pension reform

President approves pension reform

Ukrainian President Petro Poroshenko has signed the law introducing amendments to certain legislative acts of Ukraine on increasing pensions, reads a statement posted on the website of the head of state on Sunday. 

"I want to congratulate all retirees, because justice is being restored. I emphasize that the law provides for an increase [in pensions] not only now, because they have always tried to raise payments for retirees before the elections. We are doing it now, and the modernization of pensions is established as an effective working mechanism on a permanent basis," Poroshenko said.

According to him, now it is important to do everything possible to ensure that Ukrainian retirees have their pensions recalculated as soon as possible. "They scared us that we would not be able to carry out pension reform without raising the retirement age. We found the optimal mechanism together. By the way, I would like to emphasize separately that our arguments were so convincing that they were supported by the international community," Poroshenko said. 

He added: "I want to congratulate all Ukrainians, because we all will become pensioners, and it's very important that justice was established by this pension reform."

As Ukrinform reported, on October 3, the Verkhovna Rada adopted a pension reform bill, which envisages the recalculation of pensions from October 2017 and an increase in the minimum insurance period for retirement from 15 to 25 years from January 1, 2018.

The recalculation of previously assigned pensions from October 1 will be carried out using a single average salary figure for the last three years (2014-2016) in the amount of UAH 3,764.4.

The parliament also established the recalculation of pensions using the ratio of one year of service at one percent (now the ratio is 1.35%).

The following rules will be applied for the transitional period in 2017-2019 - the use in 2017 of the average salary for 2014-2016 in the amount of UAH 3,764.4 and the ratio of one year of service at 1.35%; the use in 2018 of the average salary for 2016-2018 and the value of one year of service at 1%.

Starting from 2019, pensions will be assigned using the average wage for the past three years and the ratio of one year of service at 1%.

The minimum age pension is set at the level of the living wage for disabled people who have 30/35 years of service (for pensions awarded before October 1, 2011 - in the case of 20/25 years of service).

The bill preserves the right to assign an age pension at the age of 60 for persons who have a full pensionable service period. From January 1, 2018, the age pension will be set at the age of 60 for people who have 25 years of work as of January 1, 2018. The range of required length of service will grow annually by 12 months and reach 35 years in 2028.

Those citizens who will have 15-25 years of pensionable service by January 1, 2018, will be able to retire at 63. From 2028, pensions at the age of 65 will be awarded to persons who will have 15-25 years of pensionable service.


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