In Ukraine, plans are underway to change the order of pension indexation: who does this concern

Boris Bodnar
Boris Bodnar Journalist
In Ukraine, plans are underway to change the order of pension indexation: who does this concern
The Government of Ukraine wants to review the pension recalculation mechanism, making it effective and predictable for those who are currently receiving pensions.

This is reported by RBC-Ukraine citing a draft law posted for discussion on the website FPU.

As stated in the explanatory note to the draft, to comply with the requirements of the Memorandum on economic and financial policy with the IMF, the government must take all necessary measures to improve and simplify the pension system.

In particular, the government has committed to proposing a unified approach to the annual increase of all pensions assigned within the pension system, exclusively through the mechanism of indexation.

The draft proposes to make indexation of pensions mandatory for former civil servants and military personnel.

According to the draft, pensions awarded under the Law "On Civil Service" are recalculated annually from March 1, taking into account the growth of household incomes in Ukraine and the increase in consumer prices by a coefficient of increase.

Additionally, pensions awarded to military personnel and their family members are recalculated annually from March 1, considering the growth of household incomes.

Indexation of Pensions in Ukraine

Annual pension indexation in Ukraine occurs March 1. It considers the inflation rate and the wage growth over the past three years. Essentially, this is the only mechanism for increasing pensions. No other increases are planned for 2025.In 2025 the indexation was carried out for both civil servants and former military personnel, although this is not legally mandatory.

 

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