The Ministry of Social Policy is discussing further changes to the pension system, which include reviewing certain exceptions in the solidarity level and the possibility of introducing a funded component. At the same time, experts draw attention to budget constraints and risks of implementing initiatives, particularly regarding increasing minimum payments.
UNN journalists spoke with professional economists to find out what pension reform would mean for every Ukrainian.
Pension reform in Ukraine: what it entails
Social Policy Minister Denys Uliutin stated in an interview with RBC-Ukraine that his ministry is preparing a three-component pension reform, and the minimum solidarity pension should increase to UAH 6,000.
We propose a three-component pension reform: solidarity, professional, and funded. Our proposal is that we will not pay anyone less than 6,000 hryvnias.
The head of the relevant ministry added that the first stage of the reform is planned to begin this year or, at the latest, in 2027.
How the three-tier pension payment model works
Solidarity component. This is what works now. Working people pay contributions (Unified Social Contribution), and from this money, the state pays pensions to current pensioners. The solidarity pension depends on work experience, official salary, and general rules that apply at the time of retirement.
Special or "professional" component. This is an additional component for certain categories where the state recognizes special working conditions or special status. That is, if a person belongs to a defined category, they may receive an additional payment/separate component.
By the way, in the future, they plan to gradually replace them with professional approaches within the framework of the new model. The relevant ministry presents this as one of the three elements of the reform, along with the solidarity and funded components.
Funded component. The principle is that a person makes additional contributions to a personal account (according to government officials, this level is seen as voluntary), and then in old age receives a payment from the accumulated funds. Unlike the solidarity system, here the money is tied to a specific person, and does not immediately go to payments to others.
The funded level in the proposed model is considered voluntary: citizens will be able to make additional contributions at their own discretion (including through a voluntarily higher USC) to receive higher payments from the funded component in the future.
Experts' opinions on the proposed reform of pension payments to Ukrainians differ.
Pension reform 2026: logical streamlining without a political window
Economist, expert in fiscal policy, budget process, and pension reform Pavlo Kukhta, in an exclusive comment to UNN, says that the pension reform currently being discussed by the Ministry of Social Policy is more like an attempt to fine-tune the most painful and expensive nodes of the solidarity model, rather than a system restart.
As Kukhta explains, after the 2017 changes, the basic parameters were already stabilized, and at the same time, requirements for work experience were introduced, avoiding an increase in the retirement age.
In the current discussion, two issues are again at the center: special pensions and the funded level. But the key problem now is that the country is at war, the budget is under pressure, parliament is in crisis, and the public demand for rebalancing is not converting into votes needed to pass pension reform.
Not the system, but rather exceptions: what is actually being reformed in Ukraine
The UNN interlocutor states directly:
"The current package (of reforms, — ed.) is another variation of the proposal to streamline historical distortions. It is about the fact that the solidarity model is formally the same for everyone, but in fact has a whole layer of privileges and exceptions that manifest themselves when a pension is assigned. There are many criteria: 'Chornobyl victims', mothers with many children, something else."
Instead, special regimes cost money and are financed from the general system. That is, some citizens receive better conditions at the expense of all others. Streamlining special pensions within such a framework should not be social justice at the level of slogans, but a concrete attempt to reduce fiscal leakages.
Funded pension: the right idea, but the wrong time
Pavlo Kukhta explains: the funded level has been in the public domain in Ukraine for decades, but a stable political coalition for it has never been formed.
"Now, in the fifth year of the war, it's a bit too early to talk about it," the expert is convinced.
Hence the government's compromise idea to at least voluntarily fix the funded element.
"In general, it looks like an attempt not to build a second floor when the foundation is cracking, but at least to mark on the drawing where it should have stood once," says Kukhta.
Minimum wage of UAH 6,000: real arithmetic versus political dreams
The most talked-about part of the pension reform discussion in the media is the thesis about a minimum solidarity pension of UAH 6,000. The economist and expert explained to UNN how this payment was calculated and how much it would cost the state budget.
If approximately one-third of pensioners receive close to the minimum pension, then raising it for this group by +UAH 3,000/month could mean about UAH 120 billion annually. Against the backdrop of the Pension Fund's budget, this looks like a significant additional burden that is difficult to imagine without new sources of income or emission support.
The economist emphasizes: pensions should cost Ukraine a tenth of its GDP. If expenditures are below this limit, the system begins to perform its basic support function worse. If expenditures are higher, the country either enters a "debt spiral" or the government has to raise taxes to levels that, in the Ukrainian economy, would again push salaries into the shadows.
That is, the discussion about pensions here directly hinges on the economic model: productivity, employment, tax base, investment climate.
Does a higher "minimum wage" motivate people to work "officially"?
Separately, Pavlo Kukhta draws attention to the fact that the increase in the minimum pension will not motivate Ukrainians to start working officially and not receive salaries "in envelopes." The argument is that the minimum pension is paid "in any case," so it rather reduces the incentive to legally pay contributions for those who do not see a direct return anyway.
Instead, the UNN interlocutor links de-shadowing to a broader framework.
"A quality business climate" in which it is profitable for businesses to structure and grow. As long as it is more interesting to play than to earn, there will be no de-shadowing."
The expert admits: the logic of streamlining special pensions and cautious movement towards saving for "old age" is technically adequate. But at present, significant difficulties may arise in implementing it into the current economic model.
I just don't see any votes or support. Moreover, the reform will certainly not resonate with people now, but it will be interesting to accountants and financiers.
And this is precisely what becomes the key trap for any complex social reform during wartime: it requires political capital, while giving the voter not a tangible plus tomorrow, but complex rules and conflicts of interest groups today.
Pensions in Ukraine in 2026: context
The state budget for 2026 provided UAH 1.27 trillion for pension payments.
Separately, the Ministry of Finance of Ukraine, during communication regarding the draft state budget for 2026, indicated that within the social protection expenditures, UAH 251.3 billion was provided for transfers to the Pension Fund, including for ensuring payments and indexation from March 1, 2026.
In addition, the Cabinet of Ministers of Ukraine approved the Budget Declaration for 2026-2028 by Resolution No. 774 of June 27, 2025. The document defines the estimated indicators of the subsistence minimum for disabled persons (persons who have lost their ability to work):
- 2026 — UAH 2,564;
- 2027 — UAH 2,715;
- 2028 — UAH 2,859.
This trajectory of the subsistence minimum is usually described as a phased increase in the minimum pension, as a number of pension payments, allowances, and surcharges are calculated with reference to the subsistence minimum for persons who have lost their ability to work.
It should be noted that it is worth considering that from January 1, 2026, the subsistence minimum for persons who have lost their ability to work was increased from UAH 2,361 to UAH 2,595, which became the basis for recalculating the minimum and maximum pension amounts and the components of payments that depend on this indicator.
We remind you that a few days earlier, the Ministry of Social Policy refuted the fake news about the cessation of payments for 1.3 million pensioners. Payments were suspended only for 337 thousand people who did not pass identification or did not provide data on the absence of payments from the Russian Federation.