The average pension in the country will grow by at least 20%.
Pensions will grow
Since January 1, the additions to the pensions received ex-military. As explained by the Minister sotspolitiki Andrey Reva, pensions will increase on average by 25%. According to the official, the country has about 550 thousand pensioners of the security forces, and their average pension – UAH 4900, so the markup will be equal to 1225 UAH.
Do not forget that the country also planned the annual increase of pensions, adjusted for inflation and wage growth. The annual increase is in automatic mode. As they say in the Ministry, the increase will occur by the same approaches and will be 50% of average salary plus 50% of the increase in inflation.
The government noted that the recalculated pension since March, when it will be finally counted inflation and average earnings growth for 2018
“If inflation this year will be 12%, as projected, then the calculation takes 6%. The wage Fund has grown for eight months on 25%, that is, the count of 12.5%. In sum, it is 18.5%. This means that pension increases will occur within 20% of the pensions, which are now,” said Reva.
Recall that the average size of pension in Ukraine in the beginning of 2018, amounted to slightly more than 2.5 thousand. From this calculation 20% increase to the pension will be slightly more than 500 UAH.
Note, the Prime Minister of Ukraine Volodymyr Groisman stated that the average pension in the country in 2019 will grow by 900 UAH.
In addition, from 1 January 2019, the minimum pension was increased for those pensioners who are over 65 years of age and whose tenure exceeds 30 years (for women) and 35 years (for men). So, their pensions will rise by UAH 172 (up to 1669 UAH).
According to the Director of the Department for pensions of the Pension Fund (PF) of Ukraine Elena Okhrimenko, the legislation provides that the amount of the pension for such persons may not be less than 40% of the minimum wage.
“As the indicator of the [minimum] wage increases of up to 4173 from January 1, 2019, and, of course, if for all pensioners minimum pension today in 1497, in this category of people will be recalculated and the amount of the pension will increase by 172 UAH”, – said Okhrimenko.
In addition, pensions will be recalculated in 2019, twice the growth of the subsistence minimum:
– since July 1 – the recalculation of pensions in connection with increase of living wage up to UAH 1564;
– December 1 – recalculation of pensions in connection with increase of living wage up to UAH 1638.
Run funded system is again transferred
Since the beginning of 2019 in the country was to earn the second tier of the pension system, the essence of which is that every Ukrainian (or the employer on his behalf) of the salary will deduct a certain amount to the state account from which the pension will be possible to obtain additional payments.
But Parliament and introduced the necessary bills, therefore, pension reform is in limbo. The Minister of social policy Andrei Reva during the final press conference announced that the funded pension system in Ukraine will be introduced from 1 January 2019.
“Officially, legally, it is not tolerated. She had to be on 1 January 2019. But till today the bill had not been introduced in the Verkhovna Rada. It was the subject of consideration during the last negotiations (with the IMF). And they now asked: for the whole year considered in the Verkhovna Rada the law, and if you are in a hurry to implement it, it may unbalance your financial system. And given that you have now the elections in 2019, you can imagine how it would be fun. Therefore, it was decided to wait on this process to be postponed,” – said the Minister.
In most developed countries pension provision is based on the combination of the two systems: public (PAYG) and private (funded).
Recall that there are three levels of the pension system, two of which already work in Ukraine (first and third):
– the first level – the solidarity system, which is now all receive pensions. Its essence that from the employees ‘ salaries are automatically deducted the contributions to the Pension Fund;
the second level is cumulative, every Ukrainian deducts from the salary a specific amount for future payments;
– the third level – voluntary cumulative, when a person saves money for retirement in the Fund, which he considers perfectly reliable.
PAYG pension system is designed to provide citizens with the minimum and guaranteed pension, and two subsequent level help to increase the size of future pension. By the way, level three – voluntary savings and has been working in Ukraine for quite a long time, but use it few people – only one in 13-th Ukrainian.
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