Pension policy

The pension coverage system in Ukraine has three levels by offering everyone financial stability in the future.

Law of Ukraine “On Compulsory State Pension Insurance”

The first level is the solidary system.

It is the principal level where payments are financed by the Pension Fund. The solidary system is based on the principles of mutual support and directed at social protection of everyone who has reached the retirement age.

The second level is the defined contribution system (not in effect now).

The defined contribution system enables every working citizen to accumulate their own pension funds at the special account with the Defined Contribution Fund. This level offers additional opportunities to form individual pension savings. The principal benefits of the defined contribution system are as follows:

Access to additional sources of pension to ensure comfortable life level.

Transparency of savings that enables everyone to control their contribution into the future pension.

Opportunity to transfer the funds accumulated to heirs in case the insured passes away.

Creation of the stable investment base to support economic growth.

The third level is the non-state pension coverage system.

This level enables citizens and employers to form additional pension savings on a voluntary basis. Non-state pension coverage works via:

• Pensions funds that conclude contracts with depositors to ensure pension payments.
• Insurance companies that offer insurance agreements to cover different risks associated with disabilities or loss of a family provider.
• Bank institutions where pension deposit accounts can be opened to accumulated pension savings.

The system for compulsory state pension insurance covers the first and second levels while the defined contribution system includes the second and third levels, thus enabling every Ukrainian to form the stable and flexible pension support.

How to calculate your future pension?

You must know how to calculate your pension to be confident in your financial future. For this person, the Pension Fund of Ukraine offers the special electronic service, the Pension Calculator. It is a convenient and easy-to-use tool that enables estimating your future pension quickly, based on all the necessary indicators.

What does the Pension Calculator enable?

• To calculate the approximate pension based on the contributions already paid (the single social tax) and the pensionable years.
• To check how your pension will be influenced by continued work and more pensionable years.
• To assess the additional opportunities granted by the future pension reform, namely by introducing the defined contribution system, which will allow individual pension savings.
• To check impact of increased contributions upon your future pension.

The service can be accessed at the official web-portal of the Pension Fund of Ukraine. In order to use it, go to the Personal Account at the portal. If you have not signed up yet, it can be done quickly by means of the electronic digital signature (EDS) and other identification means

1. Sign in your Personal Account at the web-portal of the Pension Fund of Ukraine

2. Select the pension calculation algorithm:

• You can calculate the pension based on the current data, the contributions and the service record as of the calculation date.

• You can also forecast how many pensionable years you will have by the retirement age, and calculate the pension based on these assumption.

The more detailed algorithm is available here.

What results can you get?

Approximate size of the pension you can receive in the retirement age, based on your current or future contributions and service record.

Detailed calculation protocol, i.e. the document on all the parameters considered that influence the final number. You will be able to see how each pensionable year and every hryvnia contributed influences your future pension.

Pension Savings: Questions and Answers

Just like in any other generally sensitive matter, myths, manipulation, fears and misunderstanding arise during the discussions on pension savings. Therefore, many people have difficulty understanding the information whirl and critically telling facts from fakes to build their own protection from manipulation.

Here is the information material of the Ministry of Social Policy of Ukraine “Questions and Answers about Defined Contribution Pensions".