As reported by RBK-Ukraine, this was shared by Daria Marchak, the First Deputy Minister of Social Policy of Ukraine, during a Zoom conference about the future of the solidarity pension system. This information is also conveyed by Kontrakty.UA.
"We anticipate that under the new reform, the pension amount will depend on the contributions a person has made from their salary, not the salary itself. When we say it depends on the salary, it leads to confusion for individuals receiving a shadow salary or those employed as individual entrepreneurs in group 3, who only contribute based on the minimum wage," Marchak explained.
Thus, according to the Deputy Minister, the formula will link the pension amount to the contributions made and the duration of those contributions.
She also mentioned that the Ministry of Social Policy conducted tests, revealing that individuals with the highest incomes today will receive the lowest pensions.
"This is because they work as individual entrepreneurs in the IT and outsourcing sectors, paying contributions only on the minimum wage. They are unaware that their pension amount is determined not by their take-home pay but by the total contributions made," the Deputy Minister noted.
According to her, a significant number of citizens do not understand how their pension is influenced by their current work results.
"Currently, we as a ministry have developed a draft law on the reform of the solidarity system and a draft law for the implementation of a cumulative system. We are working to submit these drafts for government consideration and subsequently to the parliament. We are also striving to propose a design this year for what a professional pension system might look like in the future," Marchak added.
Pension Reform
As a reminder, the Ukrainian government stated in a letter of intent to the IMF leadership about plans to carry out pension reform.
IMF experts note in the Memorandum that in the state budget of Ukraine for 2025, it is stated: the government will begin the pension reform process by July 2025, aiming to implement a system that will be sustainable and compliant with EU legislation, reduce numerous special pension agreements, and diminish the legal risks arising from the current complex pension system.
The Ministry of Social Policy has published a draft pension reform. It proposes the introduction of a basic pension amounting to 30% of the minimum wage and a points system for insurance contributions.
As explained by the Ministry of Social Policy, the introduction of cumulative pensions will not entail a tax increase. However, individuals will have the option to make additional voluntary contributions if they wish.
Additionally, today, February 26, the Cabinet of Ministers has released a resolution regarding the indexing of pensions and insurance payments for 2025. The recalculation will be conducted for retirees who retired before December 31, 2024, with a coefficient of 1.115.