Government plan for pension reform
The government plans to limit additional payments to pensioners and transition to a unified mechanism for pension indexing as part of the pension reform supported by the International Monetary Fund (IMF) and the World Bank. These changes are expected to be financially neutral for the budget in the medium term.
In particular, the government plans to submit a bill that stops the practice of tying pension increases to wage growth. This means that annual pension increases will not depend on changes in wages. An important aspect of the reform is that the changes should not increase the deficit of the pension system in the medium term.
Main points of the reform
- The government will refrain from introducing new special pensions or privileges.
- There are no plans to adopt legislation that would create additional conditional pension liabilities without appropriate financial backing.
- No changes will be initiated that could lead to a reduction in the legally defined retirement age.
According to Yaroslav Zheleznyak, the government will take measures to limit the amount of additional payments.
He also noted that a unified approach to the annual increase of all pensions in the system will be proposed. These steps are aimed at ensuring the stability of the pension system and reducing financial risks in the future.
The proposed changes in the pension system indicate the government's commitment to financial stability and reducing debt obligations. Support from the IMF and the World Bank may indicate international recognition of the need to reform a system currently facing numerous challenges. All of this could have a long-term impact on social protection and the well-being of pensioners in Ukraine.