When to retire: what will happen to the Ukrainians, who have not earned 35 years of service after the reform

The Verkhovna Rada will consider the bills on pension reform in the early fall. In the Memorandum with the IMF, the Ukrainian authorities have committed themselves to the end of may to enact the necessary reform laws, but to fulfil this requirement did not. Including is why the next credit tranche from June-July was postponed to autumn. If the document will, from next year, the Ukrainians will retire under the new rules. The website “Today” figured out what experience need Ukrainians to receive the pension after the reform and what to do if I had some experience.

Ukrainians will retire at 60, 63 and 65

The retirement age in Ukraine, despite the requirement of the IMF, to review did not. As before, the majority of Ukrainians will come out on a “deserved rest” in 60 years. However, requirements for retirement “in time” will tighten. Next year we will need a minimum of 25 years of experience. Each year of the required experience will increase by 12 months. So, in order to retire at age 60 in 2028 will need to have 35 years of experience.

Those who cannot meet this requirement, you will have to work until 63 or 65 years. Thus, the government proposes to increase the effective retirement age, without changing the number “60”, explains senior researcher of the Institute of demography Lydia Tkachenko.

Requirements for retirement in 63 years would also increase on 12 months annually. Next year for retirement at 63 would need at least 15 full years of service. But after 10 years in this age of “deserved rest” will leave Ukrainians with experience from 25 to 35 years.
At the same time, the minimum length of service for a pension at 65, according to a document reviewed not. The Ukrainians have the right to retire at this age, subject to the availability of at least 15 years of experience.

Full these innovations will earn only in 2021. From next year until the end of 2020, the bill provides for state assistance to the Ukrainians, who have reached 60 years of age in the period from 2018 to 2021 and have less of the required experience. By law, they have to wait for retirement to 63 or 65 years, but these few years they can get state aid.

“However, here too there are risks, and a lot depends on how will the Pension Fund (PF). For example, someone lucky to be born the second of January and he in 2018 will be 60 years, but it’s not nearly 25 years of experience, there are only 15. Suppose a person comes to the pension Fund retirement, and he will answer: “Sorry, new rules, and to retire at 60, you have 25 years of experience, and you are only 15, you have no such right. If the person himself not sufficiently versed, he may think that it all deprived. PF should develop detailed instructions for their employees how they should act in order that people are not left with nothing,” said Lydia Tkachenko.

If you do not reach 15 years of service, not entitled to a pension. Instead, the state guarantees social assistance. If state assistance is below the subsistence level for the disabled, the Ukrainians have the right to address in bodies of social protection and write a statement for payment.

Lucky for those who graduated from universities before 2004

The pension Fund is conducting the personified accounting of retirees since 2000. From this point PF follows more closely the social contributions. In addition, since 2004, in the insurance period has ceased to consider the time of higher education. For example, a Ukrainian who graduated from the University in 2010 to receive a pension at age 60 must work for 35 years. And those who have graduated from College, for example, in 2003, unable to retire at age 60, after working 30 years (five years will be credited with seniority for the time spent in College).

Another important innovation – the experience can be bought. Earlier, the Minister of social policy assumed that the pension reform will involve the purchase of up to five years, but after this rule was revised. At the moment the bill says about what the Ukrainians will be able to buy at least two years of experience. To calculate how much it costs, you need to determine the minimum amount of social payment = minimum wage × 22%. Now it is 704 the hryvnia. To find out the cost of one year should the amount of the minimum contribution multiplied by 24, and two years will cost 42 the minimum payment. At the moment the first year of the purchased experience is 16 896 UAH, and two years – 29 568 USD.

If there is a total of 13 years experience, two years will qualify for a minimum pension at 65 years. In addition, depending on seniority, the amount of the pension. For example, if pension reform act today, at a salary of 10 thousand hryvnia (about one and a half times higher than the national average) and 30 years of service could claim a pension in 1694, the hryvnia, and with 32 years of experience to 1806 hryvnias.

Note, as stated in the government’s presentation of the pension reform, after 10 years of retirement at 60 will go only half of Ukrainians.
As explained by the Prime Minister Volodymyr Groysman, this will create a more “fair” the less he worked, the later retirement.

“It is not necessary to take one pensioner who worked all his life, and give another that didn’t work. If health – has disability pension. But if a person did no work, did not want to work or were engaged in covert work, of course, he can’t be in the same conditions. We act in the interests of working people,” the Prime Minister said at the parliamentary hearings.

How to change the size of the pension after the reform, can be read here. Also the website “Today” I wrote about how to save for retirement yourself.