Ukraine’s Minister of Social Policy, Oksana Zholnovych, has reaffirmed the country’s commitment to delivering pensions to future generations, despite the ongoing war and acute demographic challenges.

In a podcast hosted by the Centre for Economic Strategy and Hromadske Radio, Zholnovych outlined the government’s multi-pillar pension reform strategy, efforts to equalise pension entitlements, and the long-term demographic vision underpinning social policy.

Zholnovych said the current pay-as-you-go (PAYG) solidarity system remains the backbone of Ukraine’s pension provision, as enshrined in the constitution. However, she acknowledged it is not financially sufficient on its own, typically replacing only 40 per cent of a retiree’s previous income.

The government aims to build a more resilient system through a three-tier model: The existing solidarity scheme, a new mandatory funded pillar, and a voluntary savings component.

Introducing the funded tier has raised questions, particularly given the wartime context and underdeveloped capital markets. Zholnovych responded that the reform would be gradual, starting with contributions as low as 1 per cent, and argued that predictable long-term inflows are necessary to stimulate market development.

She described this as a “chicken-and-egg” challenge, adding that deferring reform would only compound the problem.

The interview also addressed longstanding inequalities in Ukraine’s pension system, particularly the preferential treatment of judges and prosecutors who benefit from earlier retirement ages, shorter contribution periods, and pensions worth up to 90 per cent of final salaries.

Planned reforms aim to standardise pension indexation and eliminate mechanisms that allow certain groups to recalibrate pensions based on current earnings, a practice that Zholnovych said distorts fairness and undermines public trust.

Ukraine’s worsening demographics further complicate pension sustainability. The current one-to-one ratio of workers to pensioners is well below the internationally recommended two-to-one.

To address this, the government has adopted the Demographic Development Strategy 2040, which seeks to reverse population decline and encourage Ukrainians to stay and raise families.

Measures include comprehensive family support legislation, reintegration of older workers into the labour market, and a transition to a capabilities-based assessment of disability that could expand employment opportunities for people with disabilities.

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