Ukrainians now can pay to increase pension insurance record, agency announces

29.03.2023, 14:47
Ukrainians now can pay to increase pension insurance record, agency announces - Photo

Ukraine’s pension fund launched on Wednesday a voluntary insurance contributions scheme that allows for increasing one’s insurance record on which the size of the pension is based.

"Today, there is a very simple tool on the pension fund’s website that allows to make an insurance contribution in a few clicks," deputy head of the Office of the President of Ukraine Yulia Sokolovska said in a briefing.

Ms Sokolovska explained that the scheme might come in handy for several groups of people, including those who are now earning abroad but wishing to receive a pension in Ukraine;  people of pre-retirement age who do not have enough years of service for a pension; and employees with low official earnings if they wish to increase their future pension.

Payments are made through a contract with the pension fund of Ukraine signed in an electronic form. The contributor independently determines the duration, frequency, and amount of insurance contributions, with no reporting required.

The amount of premiums paid is credited for the month in which the money has been received on the pension fund account. For the uninsured, that month shall be counted into the pension insurance record; for the insured, the salary on which the pension is calculated will be increased.

"Basically, each UAH 100 of voluntary contribution increases the monthly salary upon which the pension is calculated by almost UAH 455", the pension fund explained.

Ukraine’s pensions are now paid through the fund to which contributions are made by taxing salaries and direct state funding.

Since the amount of taxes paid has been naturally decreasing, and pensioners increasing, Ukrainian authorities have been trying to work out pension reform to make the system more sustainable.

In 2022, the average pension in Ukraine was UAH 4623, but more than 60% of pensioners received less, and one in five continued to work

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