Pension reform in Ukraine: when will we switch to funded pensions?
9 December 20:13
It is planned to launch funded pensions in Ukraine in January 2026. This is stated in the draft law on pension reform published by the Ministry of Social Policy, [ komersant] reports.
The document states that starting in 2026, Ukraine will have a three-tier pension system. The first level will consist of solidarity payments. The second level will be accumulative payments. The third tier will include voluntary non-state pensions. In this way, the relevant ministry wants to make sure that future pensioners receive payments that will be more than half of their salary.
Solidarity payments will be updated as follows: the pension will consist of two components. The first is an insurance pension, which Ukrainians are currently receiving. The second is basic payments. They will be mandatory and equal for all pensioners.
The insurance pension will be calculated in a new way: instead of cumbersome formulas, a point system will be introduced, numerous allowances and special allowances will disappear to ensure that the amount of payments is the subsistence level guaranteed by the Constitution, and special pensions will be removed from the solidarity level.
What we know about funded pensions
The amount of future payments depends solely on how much a person has saved for his or her old age. Every working Ukrainian will be given individual pension accounts, which will be replenished monthly by employers and the state.
Unlike contributions to the pay-as-you-go pension fund (which are immediately spent on payments to current pensioners), the funds in the accumulation fund will remain in the person’s ownership. For example, they can be inherited.
Access to the funds will be available only after retirement. The accumulation fund that will manage this money will invest it to protect it from inflation and increase its value.
