In Ukraine pension reform has left about 3 million people with the minimum payments, despite large experience. Moreover, in the future, the Ukrainians with wages below the average can only claim a small pension. The Ministry of social policy said the situation has “revealed” an existing social injustice, though a new calculation formula of the officials satisfied.
The other day Deputy Prime Minister Pavlo Rozenko said: this year the reform can “finish”, and low payments to raise.
The browser figured out how and under what conditions can convert low pensions.
Why experience won’t help
In Ukraine 3 million pensioners have fulfilled the requirements for length of service (30 for women and 35 for men), but still get paid close to the minimum of about 1489 UAH. The Ministry of social policy think that the problem is low wages. However, the formula itself was changed so that now the experience has a much smaller role. Most importantly, salaries. Even if you work 40 years, but receive about 5 thousand UAH, the pension will still be level 1489 UAH.
The main reason – in the framework of pension reform, the estimated size of pensions is cut by about 25%. Earlier, according to the formula for each year worked gave 1.35% of the estimated earnings, is now just 1%. For example, compare what the pension this year was able to obtain a Ukrainian old and new rules. So, at a salary of 7.7 thousand UAH and 35 years of experience under current regulations you can receive pension at 1855,9 UAH. And with the “old” factor 2505 UAH. In fact, the pension cut of nearly UAH 700!
And if the salary was relatively high (or at least at the secondary level), to more minimum payout is quite real. But if the Ukrainians earning less than the national average, it “shines” only the minimum pension. The Ministry of social policy insist on really low wages were in the Soviet Union, and the new formula is to blame.
“Pension reform is a mirror, and this mirror reflected the socio – economic realities in which they lived and worked the people, that is, the realities of the Soviet Union. These realities, unfortunately, was not fair and the people who worked and received a small salary, got a small pension. Not because reform is bad, or the formula is wrong, and because it was social injustice”, – the press service quoted Minister of social policy Andrei Reva.
How do you plan to convert
“Increasing pensions to those people who have extensive work experience and small wages with which they had retired, and therefore have a small pension payments is the next phase of pension reform. In particular, it is necessary to amend existing legislation. There is an appeal of the President to the government…” – said recently the Vice-Prime Minister Pavlo Rozenko.
The Ministry of social policy say: the formula will not change, and the rules of retirement should be one for everyone. Therefore, most likely, under the new decision, first, not be allowed to reduce the assessment ratio of earnings in the case if the pensioner continued to work and receives less than before. Second, automatically will improve the experience of working on pensions, said the source in the Ministry of social policy.
In addition, also plan to use the norm of the current law, according to which the minimum pension for Ukrainians who have fulfilled the requirements for length of service, shall be not less than 40% of the minimum wage. Now this 1489 UAH, and if this year the minimum wage will increase to UAH 4200, the pension will rise to 1680 UAH. If the minimum salary will be at the level of 5000 UAH, pensions will raise up to 2000 UAH. Note, we are not talking about the minimum requirements for length of service (15 years), and the complete seniority of 35 years. That is, those who earned less experience, this innovation will not be affected.
The main question – will there be enough money. According to the results of the first quarter, the Finance Ministry said that the funds for raising the minimum wage is not enough. If this year will be able to successfully complete the plan of filling the budget, minimum wage and pensions of Ukrainians will rise.