Pensions after the reform: how will get the Ukrainians and how many are in other countries

Ukrainians receive some of the lowest pensions in Eastern Europe. “High” is the pension, which is 60% of previous earnings. At the moment Ukrainians in retirement get from 1312 hryvnia, the average payment of about 2000 USD. Thus according to calculations Minsotspolitiki, market basket cost this year of 3,200 hryvnia, in fact, the overwhelming majority of Ukrainian pensioners are below the poverty line. The website “Today” figured out how to change the size of pensions after the reform and how many are pensioners in neighbouring countries.

How to recalculate pensions after the reform

If the MPs will support the draft of the pension reform in October to 5.6 million Ukrainians “savremena” payments. The government also proposes to postpone to October the scheduled indexation of the minimum pension will increase from 1312 to 1373 UAH. At the moment the minimum payments to get the 8 million Ukrainian pensioners (total in Ukraine 12.1 million pensioners). As noted in the Cabinet, which is about 50% of the amount needed to pay the consumer basket for the disabled.

At the end of this year, as stated in the budget of the Pension Fund, the average payout will increase up to UAH 2000. However, the Fund’s experts did not consider possible October “modernity” of pensions, which will also affect the average size of payments.

For those who went on “the deserved rest” in 2007, the year before, the average salary in the three years set at 1 197,91 hryvnia. After this figure did not change. Although the average salary in 2014, 2015 and 2016 reached 3764,4 hryvnia. In October 2017 all legacy pensions recalculated taking into account the wages over the last three years. As a result, 5.6 million seniors payments will grow from 50 to more than 1,000 hryvnia.

An increase from 1000 hryvnia will receive more than 1.1 million Ukrainians, from 500 to 1000 UAH will receive an additional 1.9 million pensioners, from 200 to 500 UAH 1.2 million people and less than 200 hryvnia will receive 1.3 million.

However, the Cabinet of Ministers proposes to modernize not just the average three years salary, but also to reduce the assessment ratio experience.

For example, the Ukrainian, who retired in 2007, earned 1.5 times more than the average for the country and worked for 30 years, maybe to 1312 UAH (minimal). After recalculation of pensions, the same will be Ukrainian hryvnia to 1693, that is, at 382 UAH more.
The formula for calculating pension: P = SN * KZ * KS

P – amount of 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% and after the reform – 1%)

This approach is advantageous only for those who have long retired, says senior researcher of the Institute of demography and social studies Lydia Tkachenko. Those who retire in 2017, before determined the amount of the pension based on average salary over the last three years. But taking into account the coefficient estimates of experience of 1.35, and in the new formula, the government proposes to use the coefficient of 1.

For example, before the law came into force, the Ukrainian with 25 years of insurance experience, which has consistently received a salary two times higher than the average, could this year to receive pension at 2540 hryvnia. If the law is adopted, the same Ukrainian can claim a pension only in 1882, the hryvnia. In fact, all the future pensioners want a third to cut payments. This will allow the Pension Fund to save billions of hryvnia.

The website “Today” to understand what payments may qualify residents of the neighboring countries.

Photo: Pixabay


The minimum pension is 50% of the minimum wage
The average pension – 47% of the average wage
The contribution to the Pension Fund of 19.52% of the salary

The minimum pension for the poles this year reached 1000 PLN (6883 hryvnia). This is 50% of the minimum wage. The average pension has reached 2100 PLN (14 456 UAH), is 47% of the average wage. According to the 102nd Convention of the International labor organization, the pension shall be not less than 40% of the level of earnings of the pensioner. The poles, who earn minimum wage, “retirement” may qualify for 50% of their former income.

The amount of the pension depends on the amount of contributions to the Fund with regard to indexation and life expectancy in retirement. In fact, the poles get as many as I managed to accumulate during the work. To obtain the minimum pension 6683 hryvnia, you must have at least 20 years of experience to men and 15 to women.

The retirement age for men is 65 and for women 60 years. At the end of last year, the Polish Parliament decided to reduce the retirement age who had planned to gradually increase to 67 years.

The second level of pension system – storage – introduced in 1999. Pension funds have become a major source of money for mortgages and the financing of the costs of servicing domestic debt. The Pension Fund of the poles have to give of 19.52% of their salary, with half of this amount is paid by the employer. On the average for Poland pension to buy 584 kilos of sugar or to rent a Studio apartment in Krakow.


The minimum pension is 41% of the minimum wage
The average pension – 30% of the average wage
The contribution to the Pension Fund – 22% of salary

The average pension in Ukraine – more than 2,000 hryvnia, the average salary at the moment – more than 6,000 hryvnia. In fact, the average payout at retirement is only 30% of the average wage. This ratio of salaries and pensions due to a formula that considered the size of payments. Thus, the Ukrainian pension not only depends on the seniority and salaries, but the average salary in the country for three years. The average for three years, the salary can be several times lower than wages over the past year.

Each year is evaluated at the moment of 1.35%, and next year is 1% of average earnings over the past three years. In fact, to obtain at least 40% of notional earnings, you need to officially work for 40 years.

Cumulative level in Ukraine is not running, and the size of Pension Fund contributions by a few percentage points higher than in Poland. With each paycheck Ukrainians pay social contribution at 22%.
For the average Ukrainian pension you can buy 135 pounds of sugar, to rent a Studio apartment in the regional center (in addition to the Dnipro, Odessa and Lvov – it is more expensive) or pay 290 cubic meters of gas.


The minimum pension is 109% of the minimum wage
The average pension is 40% of the average wage
The contribution to the Pension Fund – 22% of salary

In Russia the minimum wage is lower than subsistence minimum for the able-bodied. At the moment, the minimum salary in Russia is 7,800 rubles (3408 hryvnia), and the minimum pension – 8540 roubles (more than 3,700 hryvnia). The average pension is 40% of the average wage. This is higher than in Ukraine but lower than in Poland.

The “Northern neighbor” has two-tier pension system – jointly funded. As in Ukraine, every working citizen pays from his salary 22% retired. 6% go to the funded system to an individual retirement account, and another 16% – in the insurance pension (solidarity system). Optionally, it is possible to abandon insurance pension and the full amount to be paid to the individual account.

On the average pension, Russians can buy approximately 322 kilograms of sugar, to rent a one bedroom apartment in a small town. The consumer basket in Russia is 10 thousand rubles and the average pension has reached 14 thousand rubles. However, it is worth noting that the situation in different regions of Russia can be very different. In some republics, the average pension is less than 10 thousand (Dagestan, Chechen Republic, Komi Republic).


The minimum pension is 64.5% of the minimum wage
The average pension – 38% of the average wage
The contribution to the Pension Fund – 29% of salary

In Belarus one of the highest loads on the payroll. So, with each paycheck 29% is deducted “retired”. The ratio of average pension to average wage is just 38%. This is more than in Ukraine, but less than in Poland and Russia.

“The right to a labour old-age pension on General grounds available to men when they reach 60 years old with experience of not less than 25 years, women – on reaching 55 years with experience of not less than 20 years”, – said on the official website of the Ministry of labour and social protection. From January 1 next year, the pension age will gradually increase, men – 63 years, women – 58 years.

For an average pension in Belarus you can buy 250 pounds of sugar, to rent an apartment in a residential area of Minsk. Pensioners also afford the consumer basket (which, according to government estimates, worth $ 125).