Millions of Ukrainians, pensions will increase by almost two times: the details of the “modernizing”

The majority of Ukrainians “retirement” receive less than 1500 USD, while the minimum pension at the moment – 1247, and a maximum of 58.7 thousand. This year the government announces the increase of pensions 10.1% (in may and December), and the scale of “modernity”. The website “Today” figured out how to get rich Ukrainians retired in 2017.

How and to whom will recalculate pensions

Pension of Ukrainians depends on three indicators: the average wage in the country at the time when he retired, seniority and the ratio of own wage to the average. Given that the average salary is growing every year, the pensions of Ukrainians need to “modernize”. The last time this “modernity” occurred in the 2012 year. During this time the average salary in Ukraine increased two times, the result of millions of Ukrainians “retirement” have calculated the amount of pension below the subsistence minimum.

Photo: archive

How is the pension:

P = SN * KZ * KS

P – pension
SN – salary (average salary over the three years prior to retirement)
KZ – coefficient of wages (the ratio of his salary to the national average)
COP – coefficient of insurance (each year is multiplied by 1.35)

According to the Ministry of social policy, the pension calculated taking into account the average salary 1917,91 hryvnia. For example, the pension for the Ukrainian, who has worked for 35 years and received an average salary, can be calculated as: 1917,91 * 1 * 0,47 = 901,4 hryvnia. Given that the pension age in Ukraine can not be lower than 1247 hryvnia, the hryvnia 345,6 pay from the Pension Fund.

Last year the Minister of social policy Andrei Reva announced the coming of “modernity” of pensions based on the new average wage. As the source told “Today” in the working group of the Ministry for the preparation of the “modernization”, the pension will increase based on the average salary 3764 UAH. The coefficient of insurance will be reduced from 1.35 to 1.

After “modernizing” the same pension will be recalculated according to the formula: P = 3764 * 1* 0,35 = 1317 UAH. However, if wages, for example, was twice the national average, is now retired (with 35 years of experience) gets 1800 hryvnia, and after the “modernization” will be to 2634 hryvnia.

The Ministry of social policy plans to increase pensions for 5,6 million Ukrainians (in Ukraine 11.9 million pensioners). Some pensioners after “modernizing” will receive two times more. So, more than 1,000 hryvnia, rich 1.1 million pensioners. Increase from 900 to 1000 hryvnia unable to 487 thousand pensioners, from 700 to 800 UAH 460 thousand. The rest (and more than 3.5 million Ukrainians) the pension will rise from 50 to 700 hryvnia.

“If we are talking about the fact that in the year we have assigned approximately 450-500 new pensions, of course, all those who were appointed before 2016, are inconsistent with the newly appointed pensions. If we have 12 million pensioners, you can calculate how much we need to modernize. It is clear that each pensioner individually. It is clear that if the updating will be done, will be done for each pensioner, depending on wages and seniority. It is clear that the modernizing not everyone will get a raise, because sometimes due to different bonuses pension is bigger than when modernizing. This also is”, – told the “Today” Deputy Chairman of the Pension Fund Nikolay Saber.

“It is clear that the modernizing not everyone will get a raise, because sometimes due to different bonuses pension is bigger than when modernizing. This also is”, – told the “Today” Deputy Chairman of the Pension Fund Nikolay Saber.

Where to get money for “modernizing”

At this point the”legacy” pensions received 8.5 out of 11.9 million pensioners. According to the calculations of the Cabinet, the “modernizing” of pensions will cost the state at 47.7 billion. Experts are sure to collect an additional sum will be extremely difficult. “Of course, so they are unlikely to collect. The figures given are very different. The modernizing was said Rozenko (Vice Prime Minister of Ukraine – ed.) need 40-50 billion. We did a calculation, which it looked like I was about 70 billion hryvnia to significantly modernize pension. So much money they do not collect. And it is difficult to estimate how many will get their salaries, what will be the dynamics of what will happen to the economy”, – says senior researcher of the Institute of demography and social studies Lydia Tkachenko.

On request “Today,” the Pension Fund said in the budget for this year is “modernization” of pensions is not provided. “The budget are based on current legislation. Legislative decisions about the modernization level of pensions at the moment”, – said the Agency.

Money on recalculation of pensions to plan for the expense of an overfulfillment of the budget of the Pension Fund. Most likely, it will hold in the second half of this year. In an interview with one of the online publications Pavlo Rozenko said: “raising the minimum wage after the first month gave additional replenishment of the Pension Fund of 18%, that is, we are 18% collected more than was planned for January 2017. If we keep this momentum, if we see that the business understood that it is necessary to legalize and pay taxes… of course, we will take a decision about an additional increase of pensions, or about the “modernization” of pensions”.

Photo: archive

The pension Fund is replenished by contributions from employees of Ukrainians (22% of ERUs from each paycheck). For the first two months of last year, the PF has received 17.7 billion hryvnia, and for the first two months of 2017 20.6 billion hryvnia. Just this year the budget provides for revenues from ERUs in the amount 163,6 billion, and last year 107,1 billion. Despite this, the “hole” PF this year will be at 141 billion hryvnia (deficit compensated from the state Treasury).

We will remind, on average ukraisnkih men live in retirement (after 60 years) 14.8 years and women 19.9 years. The total share of pensioners is increasing. In 1959 Ukrainians over the age of 60 years was 11%, in 2001 – 21%, and in 2036-m, according to the Institute of demographic studies, will be 28%. Pensioners becomes more and young people less. Pace already in the 2032-m Ukrainians aged 20 to 60 years will be less than the Ukrainians over the age of 60.

At the moment, 10 employees comprise more than 11 pensioners. This is due to the fact that the estimated PF, 25% of Ukrainians are employed informally. Of the 20 million able-bodied Ukrainians are only 16 million, and ERU, which adds to PF, pay only 10.1 million people. The rest – farmers, service workers, etc. – have the right not to pay and actively use this right. According to estimates of the Institute of demography in 2050, in Ukraine the ratio of workers to pensioners will be 10 to 15.