Ministry of Social Policy, Family and Unity collaborates with ILO on reforming the country’s social protection system

Minister of Social Policy, Family and Unity of Ukraine, Denys Uliutin, held a meeting with an ILO team, led by Aida Lindmeier, Director of the ILO Ukraine Country Office.

“The purpose of the policies we are developing at the Ministry is creating a modern, sustainable social protection system that supports both people and the economy. It is not only about payments but also about creating conditions for development,” emphasized Denys Uliutin.

During the meeting, Helmut Schwarzer, Head at the Public Finance, Actuarial and Statistical Services at the ILO Social Protection Department, presented forecasts aimed at ensuring the financial sustainability of Ukraine’s pay-as-you-go pension system in the medium- and long-term.

The study presents an unbiased overview of the financial stability of Ukraine's pay-as-you-go pension system in the medium and long term. Its findings highlight that without reforms, the Pension Fund's deficit will grow due to demographic changes and a decline in the working-age population, while systemic changes can help stabilize the situation. Thus, the analysis provides a reliable basis for further improvement of the pension system, combining social justice, transparency, and financial responsibility.

Currently, the Ministry, in collaboration with international partners, is drafting legislation to establish an updated pension model in Ukraine.

The key components of this model include:

• Basic payment for older people: it is planned to introduce a guaranteed basic payment for citizens who have reached the age of 65 or who have a full insurance record at the age of 60. This will become a social minimum that guarantees a decent life in old age and protects the most vulnerable citizens from poverty;

• Restoring the principles of solidarity: the Ministry of Social Policy proposes a single basic formula in which the size of the pension depends on the contributions paid. This means that the Pension Fund will remain solvent, and citizens' contributions will directly determine the size of their pensions, making the system transparent and fair;

• Transformation of special pensions into professional pensions: it is planned to separate solidarity pensions according to uniform rules for all and to create professional pensions for certain categories of employees at the expense of additional contributions. This will balance the system and increase the fairness of payments;

• Updating approaches to the accumulation system: a model of voluntary accumulation pensions with state incentives and guarantees of pension capital protection is being developed. It will complement the solidarity system and contribute to the formation of personal savings for old age;

• Decent support for veterans. This refers to decent support for veterans who are defending Ukraine in the war with russia. There are plans to introduce additional pension payments for combat experience with clearly defined and transparent criteria for calculation, which will ensure fair and transparent remuneration for veterans for their service and contribution to the national defense.