Another surprise for potential pensioners
April 30 this year, the Cabinet of Ministers of Ukraine submitted to the Verkhovna Rada of Ukraine the draft Law of Ukraine №2767 "On amendments to certain legislative acts of Ukraine on introduction of a funded system of compulsory state pension insurance and common principles of pension accruals."
By this draft law of Ukraine, the government intends to implement a comprehensive reform of the pension system in Ukraine.
The goal is to develop a multilevel, multicomponent pension system that will allow to pay pensions from three different sources:
- PAYG system;
- Funded system;
- Private pensions.
The draft law provides for improvement of the PAYG system functioning, including the appointment of a pensions under single law and the abolition of special pensions (except for military), exemption of the PAYG system from non-typical payments, and determination of amounts of all types of pensions, allowances, raises and additional payments to them in one Law.
As of January 1, 2016, pension for public servants and similar persons (judges, prosecutors and MPs) will be appointed under general conditions. Special pensions appointed before January 1, 2016 will be paid in the amount specified by the legislation in force until that date.
Funded pension system is to be introduced on January 1, 2017. Persons under 35 will be subject to mandatory insurance under the funded pension system. Also the funded system provides for voluntary participation, which is open to people aged 36 to 55 years. It is assumed that in 2017 the contribution rate will be 2 per cent and every subsequent year it will increase by 1 percent until it reaches 7 percent in 2022 after which this percentage will remain unchanged.
The draft law also defines the categories of participants of the professional pension program.