World Bank Country Director for Belarus, Moldova Satu Kahkonen speaks for the necessity to introduce automatic indexation of pensions in Ukraine from 2018, but not from 2021, as it is stipulated by the current draft law on the pension reform, proposed by the Cabinet of Ministers to the Verkhovna Rada, Finance.ua reports.
“I would like to mention one more concern in this context. We consider that the indexation, which is stipulated by the law itself, should apply in 2019-2020, but not only from 2021. It is important for transparency and stability of pension payments and for the avoidance of reduction of pension amounts”, she said during the round table in Kyiv on Tuesday.
According to Kahkonen, the creation of the system, which would be based on the rules, but not on the subjective decision of the state apparatus, is one of the aims of the reform.
This aim will not be achieved, if the indexation in 2019-2020 is left to the discretion of authorities, she said.
Kahkohen considers that such ambiguity of indexation of pensions in 2019-2020 may undermine the confidence of citizens to the pension reform; it needs to be avoided.
The governmental draft project of pension reform stipulates that in 2019-2020, the indexation of pensions will be carried out on each separate decision of the Cabinet of Ministers.
Each year since 2021, the average salary index will be reviewed by 50% of the salary growth for previous three year and by 50% of the Consumer Price Index.
Reference information about Finance.UA:
The draft pension reform stipulates the modernization of pensions through reassessment of social benefits from October 1, 2017, using the single average salary index, which is used for awarding the pension in 2017, amounting to 3,764.4 UAH.
The pension reform stipulates the retirement subject to the availability of pension insurance record not less than 25 years, which will increase up to 35 years until 2028.
The state social aid will be administered the persons, who will not have required insurance record as of 2018, on reaching the age of 65.
