Ukraine's pension system is undergoing yet another transformation, while thousands of citizens working abroad are asking themselves: will they be able to receive a pension and where is it more advantageous to do so? Tax and accounting expert Olena Kistrytsia, in Yuriy Romanenko's broadcast, thoroughly examined all the nuances – from new seniority requirements to the specifics of European pension models.
Four Pension System Models: What Works in the World
Contrary to the widespread belief that Ukraine's pension system is hopelessly outdated, it is far from unique. There are four main models in the world, and the solidarity (pay-as-you-go) system used by Ukraine is widely applied in developed European countries.
Pay-as-you-go system – when the working generation pays contributions that are immediately distributed among current retirees. This model is used by Germany, France, Spain, Italy, Czech Republic, and Austria. Advantages: simplicity and social justice. Disadvantages: dependence on demographics and the number of working citizens.
Funded system – a worker saves money in funds that invest capital and then pay out pensions. Applied in the Netherlands, Denmark, Great Britain, Sweden, and Poland. Advantage – independence from demographics. Disadvantage – risks associated with financial markets and possible fund failures.
Italian notional account model – virtual savings are divided by life expectancy. The longer the population lives, the smaller the monthly pension with the same contributions. Used in Sweden, Italy, and Poland.
Basic social pension – the minimum that the state guarantees to everyone. Elements of this system are present almost everywhere as a social safety net.
It's important to understand: most European countries use mixed models, combining several approaches for reliability and system stability.
Ukrainian Realities: 32 Years of Service and Minimum Pension
Since 2025, Ukraine has new requirements for retirement at age 60 – now you need to have 32 years of service (previously it was 30 years, and before that – 30 years for men and 25 for women). This is not an increase in retirement age, but an increase in service requirements.
If there are no 32 years of service, alternative options exist:
- At age 63 you can retire with 23 years of service
- At age 65 15 years of service are sufficient
Until 2004, service was counted as employment-based – according to entries in the work book. It included years of university education, military service, and childcare up to three years. Since 2004, personification was introduced, and service became insurance-based – only the period of contribution payment is counted.
The minimum pension in 2025 is 2,595 hryvnias, the maximum is limited to 10 minimum pensions – 25,950 hryvnias. At the same time, contributions are taken from 20 minimum wages, meaning Ukrainians pay more into the system than they can receive from it.
Pension Catastrophe for Self-Employed
A particular problem is the situation with individual entrepreneurs (FOPs). Until 2017, FOPs were not required to pay the unified social contribution (USC). Even when pension deductions were included in the unified tax, a year of work gave only 5 months of service, since contributions were calculated from the minimum base.
Olena Kistrytsia cites heartbreaking examples: an entrepreneur who worked as a FOP for 40 years and believed he had solid service, upon applying for a pension discovers that there is practically no service. Result – entitlement only to the minimum pension.
Since 2017, USC became mandatory for FOPs. In 2022, with the start of full-scale war, the state exempted entrepreneurs from payments until the end of the war plus 12 months after. However, in 2025, this provision was canceled – right during the war, which many experts consider absurd.
Today, a FOP pays 5% of turnover + 1% military levy + USC 1,902 hryvnias (in 2024 it was 1,760). The pension is calculated from the minimum wage, so even with a successful business, a FOP will receive the minimum pension. For entrepreneurs who already have the required service, further contributions add practically nothing to the future pension – only fractions of a percent.
Digitization of Work Books: No Need to Panic
By June 9, 2025, it is recommended to digitize work books. This can be done by either the employee or the employer. The process is simple: scan the book (even with a phone), go to the Pension Fund website via electronic key (Diia, Privat24, and others), find the "Work Book" section and upload the document.
Important: the digital version does not replace the paper one and does not particularly affect service, which has been visible electronically since 2004. Olena Kistrytsia reassures: even if you don't make the deadline, the Pension Fund will continue to accept paper work books. This is not a critical deadline, and no one will be deprived of a pension due to untimely digitization.
Pensions When Working Abroad: 23 Countries and Two Principles
Ukraine has concluded pension agreements with 23 countries. Two main principles apply:
Territorial principle (Azerbaijan, Belarus, Egypt, Kazakhstan, Kyrgyzstan, Georgia, Moldova, Mongolia, Russia, Romania, Tajikistan, Turkmenistan, Hungary, Uzbekistan) – a person receives the entire pension in the country of residence, including what was earned in Ukraine. Ukrainian service is counted in the calculation.
Proportional principle (Bulgaria, Estonia, Spain, Latvia, Lithuania, Slovakia, Czech Republic, Portugal, Poland) – each country pays proportionally to the time worked. If a person worked 10 years in Poland and 15 years in Ukraine, they will receive two separate pensions – Polish and Ukrainian.
To process a pension in Ukraine when working abroad, it is necessary to provide properly formatted European documents: work book equivalents, employment contracts, salary printouts. Ukraine's Pension Fund will contact pension funds of other countries and verify the data – drawing up certificates "on the knee" won't work.
When working in several EU countries, documents need to be submitted in only one – according to the last place of residence. This pension fund will independently contact the funds of other countries where the person worked.
European Pensions: Age, Service, Contributions
Retirement age in Europe:
- Germany: 65-67 years (transition period)
- France: 64 years
- Italy: 67 years
- Spain: 65-67 years
- Poland: 60 years (women), 65 years (men)
- Sweden: 63-67 years
- Great Britain: 66-68 years
- Czech Republic: 65 years
Minimum service:
- Germany: 5 years (for migrants this is a huge advantage)
- France: 42-43 years for full pension
- Italy: 20 years
- Spain: 15 years (for full 37-38)
- Netherlands: 50 years of residence for maximum
- Czech Republic: 35 years
- Austria: 15 years
Percentage of pension contributions:
- Germany: 18.6% (equally employee and employer)
- France: 28% (11% employee, 17% employer)
- Italy: 33% (10% employee, 23% employer)
- Spain: 28.3% (4.7% employee, 23.6% employer)
- Ukraine: 22% (employer only)
For migrants, Germany (only 5 years of service for minimum pension), Poland, Sweden, and Finland are considered the most accessible. The most difficult – in Czech Republic, Italy, and Spain due to high service requirements.
Should Ukraine Change Its System?
Olena Kistrytsia expresses skepticism about proposals to reform Ukraine's pension system toward a funded model. The main argument: a funded system requires a developed investment market, which Ukraine doesn't have. Transitioning to funds may only lead to citizens paying more "who knows where."
The current system is transparent, understandable, depends on salary and contributions. Deductions in Ukraine are comparable or even lower than European ones. The problem is not in the model, but in the level of wages and collection of contributions.
Practical Advice
- For FOPs: Calculate whether it's worthwhile to continue paying USC. If service already exists and the salary is minimal, additional contributions will add almost nothing to the pension.
- When working in Europe: Keep all documents about employment and salaries. A minimum of 5 years of work in Germany gives the right to a pension.
- When emigrating permanently: You can receive 6 months of Ukrainian pension in advance, and then arrange a transfer through the pension fund of the country of residence.
- Diversification: "Don't put all your eggs in one basket" – small pensions from several countries are better than dependence on one system.
The average life expectancy of a Ukrainian man is 64 years. Living to retirement age and receiving it is already an achievement. Therefore, experts advise not to count on a state pension as the main source of income in old age, but to create your own savings and invest in health.
