Today, roughly every fifth Ukrainian receives a pension under a special law; this payment regime continues to operate in six key areas. About this stated First Deputy Minister of Social Policy Daria Marchak during the public debate “Justice vs Privileges: The Future of Special Pensions”.
“Today, approximately one in five Ukrainians is a person with a special pension. In Ukraine, there are 11 different laws that regulate the assignment of pension payments. Some of them have already expired, such as the law on civil service, on the National Bank, on mass media, etc. These special systems have already been integrated into the general pension system. But there remain six large areas where special pension systems are maintained. These are, in particular, miners, the prosecutor’s office, judges, Chernobyl legislation and the largest category are persons released from military service”, – informed Marchak.
She explained that these systems have several fundamental differences from the general one. In particular, we are talking about the possibility of retirement at a much younger age, sometimes even up to 40 years old.
“The worst, in my opinion, consequence of such rules is that we wash a significant number of people of working age out of the labor market. Today we have a large deficit in the labor market that is not covered by current candidates. And the soft retirement age is one of those areas where there is potential to reduce this deficit.” Marchak emphasized.
Another key difference is the seniority requirements. While the general pension system requires at least 30 years of service, special systems often require 20-25 years and a lower minimum retirement age.
“The third major benefit, characteristic of special pension systems, is a separate formula for calculating payments, which is much more privileged, compared to the usual pension. According to the general pension law, the replacement ratio (the share of wages covered by the pension payment) must be at least 40%. For example, it is 80% for miners, 65% for law enforcement officers, 60% for prosecutors, and 60% for judges – 50%. In some places, the actual coefficients may exceed 100%. For example, we have court decisions according to which a prosecutor received a pension of UAH 97,000., said the deputy minister.
Particular attention is paid to the pension conditions for the employees of the prosecutor’s office, where, in addition to general benefits, there is also the right to receive a pension for years of service together with the salary.
“According to this law, prosecutors can receive a pension for years of service in parallel with their salary, which is not even provided for in other special systems. It is this norm that is currently being tried to be removed by the draft law prepared by the Committee on Social Policy and Protection of Veterans’ Rights, which is ready for the second reading in the parliament.” – added Marcak.
Currently, the Ministry of Social Policy, together with a specialized committee, is working on reforming special pensions. In particular, it is planned to create professional pension systems in which increased payments will be ensured by increased contributions.
