The upcoming pension reform will require a mandatory contribution of 9% from salaries towards a funded pension.
This statement was made by Ukraine's Minister of Social Policy, Oksana Zholnovich, during a press conference. It is noted that this share of salary deductions in the future will allow an individual to receive 20% of their average lifetime salary as a pension.
At the same time, individuals will have the option to voluntarily contribute a higher percentage of their salary towards the funded pension.
It is known that the government’s draft law on pension reform may be submitted to the Rada as early as 2025. The minister believes that the first accumulations within the funded pension system could begin as soon as 2026.
Pension Reform in Ukraine
Pension reform will commence in Ukraine in 2025, as stipulated by the requirements of the International Monetary Fund. In a memorandum with the IMF, it is stated that by the end of March 2025, the Cabinet of Ministers plans to submit a draft law to the Verkhovna Rada that will prohibit any changes to the pension system outside of pension legislation. Indexation will become the sole mechanism for increasing pensions.
Speaking about the future reform, Minister of Social Policy Oksana Zholnovich noted that, according to the institution's plans, an effective administration system needs to be developed to implement the funded pension system.
"Each of us, when directing a certain resource, sees that part of it goes towards growth, but a certain percentage always goes towards administration, meaning salaries for specialists, oversight, and so forth. To reduce this administration, we need to create quality IT services," she explained.