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Khomych I. O.

The scientific-practical Law Journal
Almanac of Law Volume 14 (2023), 521 - 526 p.

DOI: 10.33663/2524-017X-2023-14-521-526

Khomych I. O. Indexation of pensions in Ukraine: mechanism and problematic issues.

The article carries out a scientific and practical study of the procedure for calculating pensions in the solidarity system of pension insurance in connection with the annual indexation in accordance with the Law of Ukraine On Mandatory State Pension Insurance dated 07/09/2003 No. 1058-IV. The definition of the concept of indexation of monetary incomes of the population is given. Changes in the legal regulation of indexation of pensions for the period from 2004 to 2023 are highlighted. Attention has been drawn to the fact that since 2004, two parallel pension indexation procedures have been provided for: the first is stipulated by the first part of Art. 42 of Law No. 1058- IV in accordance with the legislation on indexation of monetary incomes of the population, and the second in accordance with the second part of Art. 42 of the said Law. From October 1, 2017, the first part of Art. 42 of the specified law is excluded, therefore, from this date, indexation of pensions is carried out only in accordance with part 2 of Art. 42 of the said Law. A comparison and analysis of pension calculation procedures in connection with indexation, approved by the Cabinet of Ministers of Ukraine in the editions that were in effect until February 2019 and after, was carried out. The reason why pensions assigned during the last three years preceding the year in which the pension is recalculated in connection with indexation has not been increased in recent years has been revealed. It was emphasized that the current pension indexation mechanism is unfair and discriminatory. It is proposed to bring the Procedure for indexation of pensions approved by the Cabinet of Ministers of Ukraine into compliance with the Law of Ukraine On Mandatory State Pension Insurance, including the provision that pensions assigned based on applications received by December 31 inclusive, that precedes the year in which the recalculation is carried out, are subject to recalculation in connection with indexation, and excluding the reference to October 1, 2017 as the date on which the indicator of the average salary (income) in Ukraine was taken into account, from which insurance premiums were paid, and which is subject to an increase by the corresponding factor increase in indexation of pensions. 

Key words: pension provision, mandatory state pension insurance, pension, indexation, pension recalculation, average wage index.

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