How will the retirement age and pensions change in 2020?

People approaching retirement age are increasingly thinking about the issue of assigning a pension. How much will they pay? At what age should I register? Will they raise the age limit? Many people are simply concerned with the question “Will I be able to live until retirement?” This concern of Ukrainians is quite understandable. After all, in old age, few people manage to maintain good working capacity; health, as a rule, fails. Therefore, pension payments for most old people become the only source of income they earned.

At what age do Ukrainians acquire pensioner status: current situation

The procedure for recognizing the right to a pension is regulated by the law “On Compulsory State Insurance”. It regulates when and with what length of work experience a Ukrainian can count on a pension subsidy.

This year, changes to this law are possible for those who have already become pensioners and are just about to become one. Today there are two conditions for retirement:

• the onset of 60 years;
• availability of insurance experience in the required amount.

If a person wants the Pension Fund to begin paying a pension immediately after reaching the age of 60, he must apply for its registration no later than 90 days from the date of reaching this age.

New bills, updates related to retirement age

Today, a bill is being developed that should change the retirement age of beautiful women. It was proposed by deputies of the Servant of the People party, who doubted the fairness of the retirement age set at 60 in 2011.

If the law is passed, the female part of the population will be able to go on vacation at the age of 55, but only if the candidate for subsidies for pensioners does not work. Officially employed women of this age will not receive the right to a pension.

If we talk about the male half of the population, it is planned that in 2028 only 1/2 of them will retire at the age of 60. Others will be forced to work until they are 63-65 years old, as they will not have enough experience. According to forecasts of the Ministry of Social Policy, the number of such elderly people (who do not receive a pension at 60) will only grow.

Important!

There are two distinctions between pension payments:

1. According to the age.
2. For years of service.

The first type of pension is assigned to men aged 65 and women aged 60. The second is based on length of service in the list of certain professions.

Amount of pension payments

The size of the Ukrainian pension remains one of the lowest in Europe. Even the periodic indexation of payments made by the country's leadership cannot save such an unseemly situation.

Thus, in January 2020, the minimum old-age pension in Ukraine was 1,638 hryvnia. At the same time, on average, Ukrainian pensioners receive 3,083 hryvnia.

Important! Ukrainian legislation provides for a “ceiling” of pension payments. Thus, the maximum pension in the country cannot exceed 16,380 hryvnia.

Should we expect stricter requirements for retirement age?

Since the “gaps” in the budget of the Pension Fund of Ukraine have increased, and the pension reform has not been able to reduce them, there is a high probability that the IMF will put forward new demands on us in terms of setting the boundaries of the retirement age. It is expected to rise to 65 years.

This year, the government increased the pension fund deficit to 157 billion hryvnia. The purpose of the event is to carry out indexation of pensions, regulated by law. For comparison, we note that in 2020 the deficit increased to UAH 139 billion.

Structure of the pension system in Ukraine

Ukraine currently has a state pension system. The purpose of its functioning is to provide material support for elderly and disabled citizens.

The pension system in Ukraine is based on solidarity principles . In practice, this means that funds for payments to current pensioners are generated from contributions from working citizens. At the same time, this system shows itself to be ineffective in Ukrainian conditions.

Thus, at the end of 2020, there were more than 11 million pensioners living in the country, which constitutes a significant percentage of the country’s population. According to unofficial data, every third Ukrainian is a recipient of pension benefits.

Due to this, as well as the difficult economic situation, PFU has a significant cash deficit. Thus, it is known that in 2019, more than 15% of the total budget of the state fund were funds specially allocated for pension purposes from the country’s budget.

Contributions to the Pension Fund themselves are mandatory for all categories of working citizens. Employers are required to pay a single social contribution (USC) for hired employees.

Attention! The size of the unified social contribution in Ukraine is not fixed and depends on the amount of wages, amounting to 22% of it.

In addition to the state pension system, there are dozens of private pension funds in the country that offer citizens services for the formation of non-state pensions.

Ukrainian legislation distinguishes three types of such organizations:

1. Open. Any person can enter into contracts with them without exception. Open NPFs offer various private programs for citizens that allow them to accumulate sufficient funds for a secure old age.
2. Corporate : These funds are created by large organizations, and their activities are aimed exclusively at providing private pensions to the employees of these companies. A corporate pension often acts as part of a social package.
3. Professional . As a rule, the founders of such organizations are professional associations. Participants in pension plans offered by such funds can only be members of the relevant trade unions.

Reference! In general, the non-state pension system in Ukraine was largely copied from models adopted in EU countries, but was not widely used in the country.

What types of internship are there?

Ukrainians have heard the expressions “insurance” and “labor” experience more than once. Let's look at how they differ below.

Insurance experience means the number of years during which a Ukrainian/Ukrainian made contributions to the Pension Fund. The length of service includes the years that people spent working (worked officially).

Many people are interested in how the requirements will change. Even more questions swirl in the mind of the average Ukrainian regarding the implementation of the pension reform. The length of service on which the retirement date depends is divided into 4 categories:

1. Labor (general). The pension fund calculates it based on entries in the work book. Used for more retirees.
2. Insurance. It is calculated according to PF data, which records the number of years and months during which a person made a compulsory insurance contribution in the amount established by the law “On Compulsory Pension Insurance” (Article 24).
3. Preferential. The experience that residents of Ukraine have working at enterprises in dangerous/harmful conditions. The list of such enterprises has been compiled by the Cabinet of Ministers.
4. Special. Experience, which gives Ukrainians the right to retire earlier. It is calculated by summing up the number of years and months spent on labor of a certain composition.

Note!

Work experience (general) is a concept in which it is permissible to include other types of experience (preferential, special), which provide benefits for the onset of legal grounds for retirement.

Until January 2004, a Ukrainian’s earned work experience was equal to insurance coverage. After this date, only the period for which the employer paid taxes to the Pension Fund for the employee (insurance period) began to be taken into account. The amount of time a person actually worked was not taken into account.

01/01/2020 – date of establishment of new rules for establishing pensions:

• 60 years;
• 63;
• 65.

The specific age of retirement depends on the length of the insurance period.

Pension Fund of Ukraine

The body implementing the policy to ensure the functioning of the state provision system for disabled citizens is the Pension Fund of Ukraine.

Its central office is located in the capital of the country - Kyiv at the address: Bastionnaya Street, building 9.

In the regions of Ukraine there are territorial bodies that implement the provisions of the legislation on state pension provision within a specific region.

You can contact the PFU by calling the contact center hotline – 0-800-503-753.

A call to the contact center is completely free for all numbers registered in Ukraine.

The PFU website operates on the Internet. On this resource, the user can obtain comprehensive information about the activities of the fund, types of pensions and the rules for calculating them, and find out the latest news.

In addition, the website contains contact information for contacting the fund, including the addresses of territorial branches in the regions of Ukraine.

Through the pension fund website, citizens can go to the electronic services portal, where it is possible to create a personal account.

Registration on the portal is possible in two ways:

• by submitting an appropriate application to the territorial body of the PFU;
• through the use of an electronic digital signature.

After registering on the PFU electronic services portal, the insured person will be able to monitor the status of his pension account , submit applications and receive the necessary documents online.

It is also useful to read: Pension fund in the DPR

How old should a Ukrainian be to retire?

We all already understand that the length of the insurance period is the main parameter in determining the date of retirement. So far this fact has not changed since 2004. It’s not so important how many years you worked in an organization or a company, the main thing is how long the management paid taxes to the Pension Fund for you. For some, the insurance experience accumulated over a lifetime will allow them to retire immediately, while others will feel the lack of it. Although there are options for purchasing insurance experience.

Our country also provides a social pension for people. You can read more about this type of pension in our material: Social pension: cash assistance if there is not enough experience.

Preferential pensions

People belonging to the preferential category should also be aware of the changes introduced:

1. For participants in combat operations
   (UBC), the age of retirement has been reduced by the Law “On Compulsory Insurance”. Thus, men can officially become pensioners at 55 years old, having 25 years of service, women - at 50 years old, having 20 years of SS. This is regulated in the Final Provision of the above law. To register, Afghans must provide documents of combatants.
2. For disabled people,
   their own rules apply in accordance with the Law “On Pensions” (Article No. 25). Persons who become disabled as a result of an occupational disease/injury at work have the right to retire early even if they do not have the required length of service. Disabled people of groups 1, 2, 3 of general diseases must have the required level of experience. For example, a 56-year-old person with a disability of 2 or 3 groups must have at least 14 years of experience.
3. Teachers
   in Ukraine are required to have 30 years of experience, which they must have in order to receive a pension. Otherwise, it is necessary to work up to the required level of experience. Employees in the healthcare and education sectors can use a long-service pension if they have reached the age of 55 and have a special work experience of at least 27.5 years (requirements for the period from April 1, 2019 to March 31, 2020). Innovations are being introduced gradually so as not to displease people.
4. The law regulating the provision of pensions to citizens (Article No. 14) determines the standards for miners
   . In accordance with it, persons who have worked for 25 years in open-pit and underground mines can retire, regardless of age. For workers in leading specialties, 20 years of experience is enough. The main condition is full-time employment in these jobs. This includes all professions related to the extraction of minerals (ore, shale, coal), the construction of mines, shafts, etc. Men who have less than 10 years of experience in this field, and women less than 7 years, can hope to lower the retirement age.
5. for military personnel
   in 2020. Persons over 65 years of age, with a working experience of 35 years for men, 30 years for women, are expected to increase their pension by 15-40%.

general information

Ukrainian pension reform contributed to the emergence of serious changes in the cash security system. Citizens of Ukraine are especially concerned about the issue of changes in the procedure for calculating pensions, as well as its indexation.

Today, there are more than 50 regulations in force throughout the country that regulate the issue of pension provision. There are also several systems for calculating old age pensions.

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Main types of pension contributions

The main types of pensions in Ukraine are listed in the table.

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Preferential benefits

You can learn more about increasing pensions in Ukraine from the video below.

Despite the difficult economic situation, preferential pensions in Ukraine will be maintained. This applies to the following categories of citizens:

• military personnel;
• civil service workers;
• persons taking part in eliminating the consequences of the Chernobyl accident;
• persons with a disability group.

For the loss of a breadwinner who participated in the ATO in the east of the country, the pension in Ukraine will be increased in 2020. If the deceased had dependent minor children, his family members will receive a double pension supplement.

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Registration of an old-age pension

As the law states, a Ukrainian who has sufficient insurance experience and has reached a certain age can become a pensioner. Registration of a pension is possible after submitting the following set of documents:

• passport;
• document on social state insurance/identification code;
• completed application;
• work book;
• diplomas/other documents confirming that a person completed his studies in the period before January 1, 2004;
• paper confirming the place of official registration (address);
• Bank account number;
• certificate from work about the amount of salary for the last 5 years;
• military ID;
• certificates confirming marriage, birth of children.

It is necessary to bring original documents and photocopies to the Pension Fund. There are a lot of free services on the Internet today that allow you to calculate the amount of your future pension using an online calculator.

Carefully study the legislative framework (laws, additional provisions, updates) as you approach retirement age. By being properly informed, a lot of disappointment can be avoided.

Will pension reform be carried out?

Due to the ineffectiveness of the current pension model in Ukraine, many citizens and experts insist on its reform. Thus, the opinion is repeatedly expressed about raising the retirement age with a concomitant increase in the average amount of material support. directly , but today the country is already tightening requirements for future pensioners.

Pensions in Ukraine are among the lowest in Europe. The government of the country is currently taking a number of actions to tighten the requirements for receiving payments. Despite this, the indexation of payments occurs extremely slowly and, accordingly, pensions grow lower than inflation.