Ukrainian parliament approves pension reform

Ukrainian parliament approves pension reform

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Ukrinform
The Verkhovna Rada, Ukraine's parliament, has adopted a bill on pension reform, which foresees the recalculation of pensions from October 2017 and an increase in the minimum period of pensionable service from 15 to 25 years from January 1, 2018.

A total of 288 lawmakers voted for the adoption of bill No. 6614 at second reading, with at least 226 votes required to make the decision, an Ukrinform correspondent reports.

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.

The Verkhovna Rada established that temporary state social assistance from January 1, 2018 to December 31, 2020 would be granted to unemployed persons who have reached the established retirement age, have pensionable service of at least 15 years, but have not acquired the right to pension payments - up to the acquisition of the right to a pension by age in the amount of the living wage, for persons who have lost their ability to work. At the same time, persons who will not have 15 years of work experience will be awarded state social assistance at the age of 65 years.

According to the parliament decision, the annual (indirect) indexation of pensions from 2021 will be conducted by increasing (recalculating) the average salary from which the pension is calculated, by 50% growth of the average salary for the past three years and by 50% growth of the consumer price index for the previous year. In 2019-2020, the Verkhovna Rada decided to conduct pension indexation according to a separate decision of people's deputies.

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