The Verkhovna Rada has restricted pensions to employed retirees by 15 percent by January 1, 2016. A total of 238 lawmakers supported the relative bill at the parliamentary session on March 2. The bill was endorsed at the fifth attempt.
Social Policy Minister Pavlo Rozenko said the urgent measures were taken since the Pension Fund of Ukraine is short of Hr 80 billion for a timely payment of pensions to Ukrainian pensioners.
“I want to say that in comparison to the bill introduced by the government, some amendments have been made,” Rozenko said.
According to the minister, the suggestion to make pension restrictions temporary for employed retirees until January 1, 2016 instead of being permanent as was proposed earlier, was taken into account.
“We have reached a certain mutual compromise and worked on the only right decision that the pension for employed retirees wouldn’t be restricted for people whose pension equals 1.5 times of living wage and disabled persons. A 15 percent restriction of pensions won’t concern those currently receiving pensions worth Hr 1,423,” Rozenko explained.
In addition, he added that the suggestion made by the relevant committee on not restricting pensions for certain types of citizens, handicapped persons of all groups, military personnel, including anti-terrorist operation (ATO) participants, and family members of deceased military personnel, was taken into account.
“The decision was made to clearly specify in the law that at a persons’ desire after quitting a job, the pension restriction [imposed] during the time of work is lifted, ” Rozenko said.
In addition, the government supported the suggestion to limit pensions for employed judges, as well as their highest pensions.
“The decision was made not to restrict pensions for servicemen, enlisted persons and overhead personnel, as well as employees of, correspondingly, the Defense Ministry, Main Intelligence Department of Interior Ministry, and all law enforcement agencies currently involved in the ATO,” the minister said.
Ukraine’s Prime Minister Arseniy Yatseniuk also commented on the bill in parliament.
“I would like to start with initial demands from our foreign creditors, and these demands are very well substantiated. The first, key demand that was put forward is to raise the retirement age from 60 to 65. It was a clear position… Thanks to yours and our joint position, we managed to lift the main, key demand put forward by our foreign partners – retirement age won’t be increased from 60 to 65. Don’t lie to Ukrainian people,” he said.
As for special pensions, he suggested that by May 1 a bill on a defined contribution pension system be prepared and brought to parliament, as it will make everyone equal in terms of the pension system.
“Objectively, this issue will be considered by the parliament for at least two months. We suggest that by June 1 this bill must be adopted. If it’s not adopted by the parliament, then all the so-called special pensions are canceled,” Yatseniuk said.
The idea that total pensionable service increases once every 5 years “is a lie; for ten years [it remains the same], and only on the 10th year the final decision on total pensionable service will come in effect,” Yatseniuk said.
In addition, Yatseniuk said that pension restrictions don’t concern “milkmaids, or janitors, or people [whose pension equals] minimum wage: everyone receiving pension worth Hr 1.500 won’t be effected by the law.”
The Prime Minister also said that unwillingness to vote for the bill was connected to the fact that “the bill deprives prosecutors, judges and other ‘honest persons’ of the possibility of receiving both pension and salary simultaneously, we are against it.”
Bill No. 2212 (registered on February 23) stipulates that employed retirees receive 85 percent of the pension, but no less then the minimum wage for disabled persons (currently – Hr 949).
According to the explanatory note, the bill suggests payouts of special pensions to incumbent MP’s, working public officers and equal-status persons, judges, prosecutors and other persons with the right to receive such pensions be ended.
As part of the bill, the Cabinet initiated a five-year stage-by-stage increase of the reduced retirement age for women and raised the pensionable service for persons with the right to a privileged pension, as well as a five-year stage-by-stage increase of pensionable service needed to receive long service pensions.
According to the explanatory note, Ukraine’s average salary (income) used to pay pension deductions in 2012, 2013 and 2014, is to be used to calculate pensions.
