Pension Reform Needed Despite Adjustments
April 6, 2026 at 07:35
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✦ AI Summary
- Pension indexing falls short due to a low replacement factor
- Current system offers Ukrainians 30% of earnings instead of 40%
- Reform proposals are necessary for equitable pension calculations
Understanding the Shortfall in Pension Payments
Danylo Hetmantsev, the head of the Verkhovna Rada Finance Committee, shed light on why pension payouts in Ukraine remain insufficient, despite recent indexing efforts. He emphasized that the current pay-as-you-go pension system requires reform due to its foundation on a deliberately lowered replacement coefficient, which measures the ratio between salary and pension. In many European countries, this ratio stands at approximately 40%, whereas in Ukraine, it hovers around 30%.
Hetmantsev pointed out that the issue extends beyond mere mathematical calculations, signaling the urgent need for an overhaul of the system to ensure fair compensation for retirees.
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