Retirees can choose a more advantageous payment option if they understand how the amounts of both pensions are calculated.
As reported by the publication "On Pension", since 2017, pensions for length of service have been abolished for most professions. However, certain categories of workers, particularly those with specific work experience, still retain this right. The determination of specific conditions and norms for pensions based on length of service is now regulated by the Law on "Mandatory State Pension Insurance".
According to the legislation, employees who have the necessary work experience, as defined by the Cabinet of Ministers, may qualify for a pension based on length of service. The calculation of the pension for length of service takes into account the average salary in Ukraine for the three years preceding the year of the pension application. For example, for pensions awarded in 2024, the average salary for 2021-2023, which is 13,559.41 UAH, is used.
For pensions awarded before 2018, the average salary for 2014-2016 (3,764.40 UAH) is applied. This data was updated in 2017 to modernize already awarded pensions. Then, year after year, the amount was indexed and as of March 1, 2024, it stands at 7,994.47 UAH.
If an individual decides to switch from an age pension to a pension based on length of service, it is important to note that these two types of pensions are calculated using the same formula. However, in such a transition, new data on the average salary for the previous three years is not applied, as this is not considered an initial pension appointment. This means that the pension for length of service will be calculated based on the salary used when the age pension was initially assigned.