Many Ukrainians, upon reaching retirement age, are faced with a choice: to take a well-deserved rest or to continue working. As explained by the Pension Fund of Ukraine (PFU), such a decision can affect the size of future pension payments, as it allows them to be significantly increased by accumulating additional insurance experience.
How payments increase if you work on a pension after 60 years
According to the Law of Ukraine “On Mandatory State Pension Insurance”, if a person has acquired the right to a pension by age, but has expressed a desire to continue working, his pension will be assigned taking into account the insurance experience acquired on the day of applying for its assignment. This means that each additional month of work after reaching retirement age affects the final amount of the payment.
The mechanism for increasing the pension looks like this:
By 0.5% – for each full month of insurance experience, if the retirement deferral is up to 60 months (i.e. up to 5 years).
By 0.75% – for each full month of insurance experience, if a person postpones retirement for a period of more than 60 months (more than 5 years).
It is important to note that for such an increase, only full months of work are taken into account. An increase for an incomplete month of insurance experience is not made.
Thus, in the case of postponing retirement for only one year, the pension increases by 6%, which indicates that continuing employment after reaching the age of 60 can significantly increase the amount of pension payments.
Features of pension payment processing and exceptions
Persons who plan to postpone the appointment of a pension must apply with a corresponding notification to the Pension Fund of Ukraine body before they reach retirement age. This step is important for the correct calculation of future increases.
However, there are certain exceptions. The increase in the pension amount is not established for persons who have previously been assigned a pension of another type (for example, a disability or long-service pension) in accordance with other laws of Ukraine or if the pension was assigned in another state. This means that the incentive program applies to those who are first applying for an old-age pension under the mandatory state pension insurance.
Thus, for Ukrainians who have the opportunity and desire to continue working after reaching 60 years of age, this is a profitable solution.
