Which will depend on the size of the pension and who will become the richest pensioner: the real math

This fall in Ukraine in the second reading will consider the draft pension reform. Now retired Ukrainians are assigned to 20 different laws, prosecutors, scientists, teachers and even journalists get paid for “special rules”. After the reform, almost all will calculate the size of payments according to the same formula. The website “Today” figured out, what pension will get the Ukrainians and who will be “richer.”

What is the maximum pension you can get the Ukrainians

“In the formula for calculating pensions for a person will have a value of two basic indicators: experience and salary. They give the opportunity to calculate his pension, and will make the mechanism transparent enough”, – said at the briefing Deputy Minister of social policy Mykola Shambir.

To receive pensions of more than 10 700 hryvnias of “simple” Ukrainians can’t. For several years in Ukraine there is a limitation on maximum amount. It does not hurt to obtain more than this amount those who retired prior to the entry restrictions in force. Those of about nine thousand people. Now retired more than 10 700 hryvnia can only get a judge.

However, the limitation on the maximum salary from which taxes to the Pension Fund. The fee must be paid only from the amount equivalent to 25 living wage. Recall that the size of social contribution – 22% of salary. Ukrainian with the salary in 100 thousand hryvnias will pay 22 thousand hryvnias fee and only 8.8 thousand. At the moment 25 living wages – a little more than 40 thousand hryvnias. With such wages and pay the fee, if wages are more, the rest of the “pension tax” exempt.

But the pension in 10 700 UAH for the vast majority of Ukrainians unattainable. For example, at the moment, with 40 years of experience for such a pension requires that the wages were about seven times higher than the average. According to the Pension Fund, in may of this year the average salary reached 6173 hryvnia. The website “Today” has developed a calculator that allows you to calculate the approximate amount of the pension.

Retirement calculator:
How many years of experience You will have time to work out:
Wages at the moment:

The result: –


It is worth noting that the Pension Fund takes into account when calculating the pay ratio of Ukrainians to the national average for each month. The calculation of the “pension calculator” to show a ballpark figure, provided that the level of wages relative to the national average does not change. The calculator also does not take into account possible surcharges for excess length. The formula takes into account the average wage relevant for 2017.

In the framework of pension reform, the government plans to cancel the “special” pensions for public prosecutors, government officials, civil servants, scientists, journalists. Innovations will affect everyone except people’s deputies and judges. Additionally, we discuss how to calculate the pension to the military. The servants of Themis on retirement are entitled to 80% of earnings including all bonuses, and the MPs – 60%. According to PFC, as of the first of January of this year the average pension of judges made up 22 thousand hryvnia, people’s deputies receive in retirement more than 15 thousand.

How to get more

The Ministry of social policy say, to a larger pension can’t qualify for the Ukrainians with the official minimum wage. In this case, the SFS estimates that about 40% of Ukrainians are part of the salary “under the table” without paying taxes with it. So, this part of the income will not be taken into account when calculating pensions.

In addition, after the reform, tougher will be considered experience. After 10 years in order to retire at 60, will need to work 35 years. From 2018 the required period increases by 12 months per year. Those who have more than 15, but less than the required experience, will retire at 63 or 65 years.

Just retired Ukrainian is affected by three factors:

  • The average wage of the insured person. In the calculation of pension takes into account personal wages of the person for all periods of employment beginning with the first July 2000.
  • The average salary in Ukraine, which paid the insurance premiums, according to the Pension Fund of Ukraine, for the previous three years. For example, over the past three years is 3764 year. By the way, now eight million Ukrainians receive a pension based on the average country wage in the hryvnia in 1198.
  • Duration of insurance for which the employee has paid pension contributions. Work experience prior to 2000 is taken into account along with the insurance.

Note, in addition to pensions “from the government” the Ukrainians have the right to participate in private pension funds. At the moment, about million workers invest in private pension funds and upon reaching 60 years of age can receive two pensions from the state and from private Fund. However, as previously wrote the website, “Today,” in such funds has its risks.

Why the need for reform

According to the Pension Fund, of the nearly 12 million Ukrainian pensioners receive a minimum pension of 8 million. “That is actually the size of pensions does not depend on length of service and earnings, with which the person paid contributions. This does not motivate people to work legally and to pay fees,” they say in PF on the system.
In addition, at the moment the pension is paid for 20 different laws (“special” pensions are for government officials, journalists, educators, judges, prosecutors, etc.).

Certain categories of pensioners are exempt, in particular, the right of early retirement. It robs the pension system of the principle of fairness and creates substantial financial pressure on the Pension Fund of Ukraine”, – say the officials.

While working one contains one pensioner. So, officially, work and pay taxes over 10 million Ukrainians (in Ukraine, there are 26 million working). 25% of the working population do not pay ERUs – they work in the shadow economy.