The Government of Ukraine has begun developing a large-scale reform of the pension system. According to information received from the Cabinet of Ministers, the draft changes will be submitted for consideration by the deputies of the Verkhovna Rada as early as this year. The Minister of Social Policy, Family and Nationality, Denys Ulyutin, revealed the key principles of the future system, which is designed to change the approach to calculating payments for citizens.

Principle of Fairness and Transparency

The main vector of the reform will be the introduction of the principle: "pension is what you earned." The new system will directly link the amount of monthly payments to the sum of insurance contributions paid by a person throughout their life. The calculation formula will become maximally transparent: the more a citizen contributes to the solidarity system, the higher their income will be in old age.

In an interview with RBC-Ukraine, Denys Ulyutin emphasized that the current pension model is "highly unfair." According to him, today there is a significant gap between payment amounts for different population groups. Even with the same seniority and income level, the pension amount can differ radically depending on the year of retirement. The government plans to balance these differences.

Three Pillars of the New System

According to the minister, the reform will consist of three main components:

  • Basic Guarantee. For individuals who do not have a full insurance record, a basic payment is provided. Its level will be determined annually by the budget. The main goal of this mechanism is to prevent poverty among elderly citizens who have not managed to accumulate a full record.
  • Special Pensions. Preferential seniority and early retirement for certain categories of professions will no longer be funded from the general solidarity system. For such cases, separate accumulation mechanisms are planned, which may include an increase in the Unified Social Contribution (USC) or other tools for forming a professional pension.
  • Accumulation Component. The possibility of a voluntary accumulation pension with an "automatic subscription" element is introduced. Citizens will be able to opt out of the program; however, as Ulyutin noted, this will lead to a reduction in the level of the future pension.

Timelines and Transition Period

The transformation of the pension system will not be instantaneous. To adapt the economy and citizens, a long transition period calculated for 13 years is provided. This will allow for the smooth introduction of new mechanisms without sharp jumps in the burden on the budget or business.

People's Deputy Olga Vasilevskaya-Smaglyuk clarified the deadlines for the legislative formalization of changes. The Cabinet of Ministers must submit the draft pension reform to the Verkhovna Rada no later than autumn 2026. Thus, legislators have time to detail all aspects to ensure significant changes in the level and fairness of payments for Ukrainians.