Pension Optimization in Ukraine: How to Exclude Your Lowest Earnings from Pension Calculations in 2024-2025
Since the spring of 2024, Ukrainians have gained a real tool for a fairer pension calculation. Law No. 2506-IX introduced the possibility of excluding periods with the lowest earnings from the pension formula such as during unemployment, receiving minimal wages, or facing difficult life circumstances. Here’s a detailed analysis of what exactly has changed, how the new rules work, what documents are needed, and what legal guarantees are embedded in the legislation.
Law of Ukraine No. 2506-IX “On Amendments to Certain Laws of Ukraine to Improve Pension Legislation” came into effect on April 16, 2024 (text of the law). It updated key articles of the Law of Ukraine “On Compulsory State Pension Insurance” No. 1058-IV, especially Article 40, which regulates the calculation of average salary for pension purposes.
From now on, a citizen has the right to apply to the Pension Fund with a request to exclude from the pension calculation formula certain periods of employment during which they received the lowest wages or had no income at all. The purpose of this approach is to increase pensions for those who have experienced difficult situations: job loss, minimal earnings, or periods of martial law without stable income.
How It Works: The Legal Mechanism of Optimization
1. Standard Optimization Up to 60 Consecutive Months
The new approach, enshrined in Article 40 of Law No. 1058-IV as amended by No. 2506-IX, allows up to 60 consecutive months with the lowest income to be excluded from the calculation of the average salary for a pension.
- This period can be chosen by the individual, but it should not interrupt the overall insurance record.
- The application for such optimization is submitted in any form to the local branch of the Pension Fund.
- The Fund analyzes the documents and makes an individual decision for each applicant.
2. Including Earnings Before July 2000
Previously, many Ukrainians could not include pre-2000 earnings in their pension calculations due to the absence of a centralized record-keeping system. Now, if an archival certificate or an employer certificate is available, these periods can also be counted in the calculation.
- You must submit official salary certificates for periods before July 2000 (e.g., from an archive or the employer’s accounting department).
- These documents, together with the application, are submitted to the Pension Fund for inclusion in the average salary calculation.
3. Preservation of Insurance Record
A key legal guarantee is that the exclusion of “problematic” periods from the pension formula in no way affects the insurance record. The insurance years for these periods are fully retained, so a person does not risk losing the right to a pension.
Practical Example
Example 1:
Ms. Iryna worked in a low-paid job from 2014 to 2018, and during the war, she was left with no income at all. Now she can apply to the Pension Fund to exclude these five years from her pension calculation. Her insurance record will remain unchanged, but her pension amount could increase.
Example 2:
Mr. Viktor worked in the 1990s and received a good salary, but due to the lack of a centralized database, this income was not automatically included in his pension formula. Now, by providing an archival certificate, he can add this data to his future pension calculation.
What Documents Are Needed?
- Application for pension calculation optimization (the form is available at the Pension Fund office).
- Income certificates for periods before July 2000 (if available).
- Archival certificates or employer documents if you want to include older earnings.
- Other documents as requested by the Pension Fund to confirm difficult circumstances (e.g., a certificate of unemployment or evidence of being in a combat zone).
What Laws and Regulations Is This Based On?
- Law of Ukraine “On Compulsory State Pension Insurance” No. 1058-IV (Article 40)
text of the law - Law of Ukraine No. 2506-IX dated April 16, 2024
text of the law and amendments - Explanations of the Pension Fund of Ukraine
official PFC website
Recommendations: How to Use the Optimization Right
- Contact your local branch of the Pension Fund of Ukraine.
- Submit an application (the form will be provided by the PFC).
- Attach all available certificates and evidence of income, especially for periods before 2000.
- If you are unsure which “unsuccessful” years to exclude, consult a Pension Fund specialist or a lawyer.
- After reviewing the documents, the Pension Fund will make an individual decision regarding your pension calculation.
Thanks to the new rules and changes in pension legislation, Ukrainians can realistically increase their future pension by excluding their “least favorable” years from calculations. Law No. 2506-IX contains clear legal guarantees: optimization does not affect insurance record and is carried out only at the person’s request.
Everyone has the right to a fair pension calculation use this opportunity if your employment history has been difficult or interrupted by war.
Official sources:
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