The Ministry of Social Policy of Ukraine is collaborating with the International Labour Organization on reforming the country’s social protection system

Minister of Social Policy, Family and Unity of Ukraine, Denys Ulyutin, held a meeting with ILO representatives in Ukraine, led by Aida Lindmaier, Director of the ILO Office in Ukraine.

“The aim of the policies we are developing at the Ministry is a modern, sustainable social protection system that supports both people and the economy. It is not only about payments but also about creating conditions for development,” emphasized Denys Ulyutin.

During the meeting, Helmut Schwarzer, Head of the Department of Public Finance, Actuarial, and Statistical Services at the ILO Social Protection Department, presented forecasts aimed at ensuring the financial sustainability of Ukraine’s pay-as-you-go pension system in the medium- and long-term.

The study provides an objective assessment of the financial sustainability of Ukraine’s pay-as-you-go pension system over the medium and long term. Its results highlight that without reforms, the Pension Fund deficit will grow due to demographic changes and the declining share of the working population. In contrast, the introduction of systemic changes allows for stabilization. Therefore, the analysis provides a reliable foundation for further enhancing the pension system, combining social fairness, transparency, and financial responsibility.

Currently, the Ministry, in collaboration with international partners, is developing legislation to establish an updated pension model in Ukraine.

The key components of this model include:

• Basic payment for older people: The introduction of a guaranteed basic payment for citizens aged 65 or for those aged 60 with full insurance contributions. This will serve as a social minimum, ensuring a dignified life in old age and protecting the most vulnerable citizens from poverty.

• Restoring the principles of solidarity: The Ministry proposes a unified basic formula in which the pension amount is determined by the contributions paid. This ensures the Pension Fund remains solvent, while citizens’ contributions directly determine their pensions, making the system transparent and fair.

• Transformation of special pensions into professional pensions: The plan is to separate the pay-as-you-go pension under unified rules for everyone and create professional pensions for specific categories of workers through additional contributions. This will balance the system and enhance fairness in payments.

• Updating the funded pension system: A voluntary funded pension model is being developed with state incentives and guarantees to protect pension capital. This will complement the pay-as-you-go system and encourage individuals to save for their old age.

Dignified support for veterans: This involves providing fair support for veterans who have defended Ukraine in the war against Russia. Plans include an additional pension payment for combat experience with clearly defined and transparent criteria, ensuring fair and understandable recognition of veterans for their service and contribution to national defense.

Tags: