Why “young” pensioners in Ukraine get more

In Ukraine in 2008, the coefficient of experience (a measure that is taken into consideration at calculation of pensions) increased from 1 to 1.35, the old pensions are not counted, and new ones were appointed based on the updated indicator. As a result, those who retired late, was in a more advantageous position. The website “Segodnia” found out why “young” pensioners get more.

Pension in Ukraine is calculated by the formula:

P = SN * KS

P – pension
SN – salary (average salary over the three years prior to retirement multiplied by the ratio of wages and insurance experience).
COP – coefficient of experience (depends on experience)

Wage coefficient – the ratio between average pay in the country and that which at that time had been retired. This factor directly determines the amount of pension. So, if, for example, the salary for the selected period in two times higher than the national average, the ratio is equal to 2, if 35% of 1.35.

In addition, until, 2012, pensions were increased by 20% from the growth of the average wage in the country – for several years this rule of law does not apply. As a result, according to the Ministry of social policy, more than 7 million Ukrainians have calculated the basic amount of the pension is less than subsistence minimum. As explained by the expert organization “Actuarial-pension consultant” Alexander Tkach, officials decided that for the “actualization” of pensions will be sufficient to index the whole amount of the pension to the inflation rate (previously indexed only the part that is within the limits of the subsistence minimum).

“Since 2012, the modernization of pensions stopped. This means that those who retired before 2012, the year actual payments frozen. And people with considerable experience and a good income at the time, now do not get recalculated pensions,” commented the Minister sotspolitiki Andrey Reva.