In the context of a changing economy and social sector reforms, Ukrainians who have reached retirement age have the opportunity to influence the size of their future payments. According to RBC-Ukraine, the law on mandatory state pension insurance provides a mechanism that allows those who decide to delay the paperwork and continue official employment to significantly increase their pension.

Mechanism for increasing payments

The standard retirement age in Ukraine is 60 years. However, if a citizen, having the necessary insurance record, does not apply to the Pension Fund and continues to work officially, their future pension is recalculated in their favor. The system rewards a longer work history with additional coefficients.

Let's consider a specific example: if a person did not apply for a pension at age 60 and worked officially until age 64 (i.e., 48 months), their calculated pension will increase by 24%. This is not a temporary surcharge, but an increase in the base pension amount. For example, with a base pension of 5,000 hryvnias, the monthly surcharge will be 1,200 hryvnias. It is important to understand that this amount will remain for the entire duration of subsequent payments and will be taken into account during all future indexations.

The math of the benefit: is it worth waiting?

The decision to delay retirement is not suitable for everyone and requires careful financial calculation. One must weigh current losses against future gains. If a citizen refuses payments for two years, they lose approximately 120,000 hryvnias (assuming an average pension). If the resulting surcharge is only 600 hryvnias a month, it will take 16 years of receiving the increased pension to compensate for the lost amount.

Therefore, before refusing accruals, it is necessary to conduct a detailed calculation, taking into account your current income and planned work experience.

Global changes in the pension system

The current situation is just part of the large-scale changes taking place in Ukraine's pension system. The government is preparing a reform that will change the principles of payment formation. The future model will be three-tiered and will combine:

  • Solidarity payments;
  • Occupational pensions;
  • The accumulation system.

The key principle of the new reform will be linking the size of payments to the contributions actually paid, making the link between work and future income transparent.

Opportunities for combining surcharges

For those who already receive a pension or plan to apply for one, there is an opportunity to receive several surcharges simultaneously. According to RBC-Ukraine information, one can combine:

  • Age-related compensatory allowance;
  • Surcharge for excess work experience;
  • Pension for special services to the state.

These mechanisms allow citizens to optimize their income in old age by using all available tools of state support.