How Foreign Employment Periods Are Counted Towards a Pension in Ukraine

On 25 April 2024, Law of Ukraine No. 3674 “On Amendments to Certain Laws of Ukraine Regarding the Regulation of the Calculation of Insurance Record and Pension Provision” entered into force. This law introduced significant changes to the rules for taking into account periods of employment abroad when granting pensions, particularly in connection with Ukraine’s withdrawal from the Agreement between the CIS Member States on Guarantees of Citizens’ Rights in the Field of Pension Provision dated 13 March 1992.

The calculation of insurance record in Ukraine is governed by the Law of Ukraine “On Compulsory State Pension Insurance” No. 1058 dated 9 July 2003, which entered into force on 1 January 2004, as well as by provisions of previously applicable legislation and international treaties ratified by the Verkhovna Rada of Ukraine. Until recently, one of the key international agreements in this area was the 1992 CIS Agreement, which made it possible to take into account periods of employment of Ukrainian citizens in the territories of participating states (Azerbaijan, Belarus, Armenia, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Uzbekistan and russia), as well as periods of employment in the territory of the former USSR before the Agreement entered into force.

On 1 January 2023, russia withdrew from the CIS Agreement. Ukraine, pursuant to Resolution of the Cabinet of Ministers No. 1328 dated 29 November 2022, also terminated its participation in the Agreement. Under Article 13 of the Agreement, its application terminates six months after the depositary officially receives notification of withdrawal. In addition, Law of Ukraine No. 3117-IX dated 29 May 2023 denounced the bilateral agreement with the Republic of Belarus on guarantees of citizens’ rights in the field of pension provision dated 14 December 1995.

To regulate issues concerning the recognition of periods of employment abroad, including employment in the former Soviet republics, the Government submitted Draft Law No. 9453 to the Verkhovna Rada of Ukraine. Despite proposals from trade unions to preserve certain guarantees that had previously applied, these proposals were not incorporated. Law No. 3674 establishes the following key provisions:

– Periods of employment outside Ukraine are included in a person’s insurance record, including on preferential terms, where this is provided for by Law No. 1058 or by international treaties ratified by the Verkhovna Rada of Ukraine.

– Periods of employment before 1 January 1992 in the territories of the former Soviet republics are taken into account as part of the insurance record provided that the person resides in Ukraine and no other state makes pension payments for those periods. The procedure for confirming the absence of such payments is to be determined by the Cabinet of Ministers of Ukraine.

– Periods of employment after 19 February 2014 in the temporarily occupied territories of Ukraine are not included in the insurance record where a person voluntarily held positions in illegal government bodies, law enforcement or judicial authorities, or participated in illegal armed formations connected with the aggressor state.

– If a person does not have sufficient insurance record acquired in Ukraine to qualify for an old-age pension, periods of employment abroad may be taken into account for the purpose of determining entitlement to a pension. This applies to countries with which Ukraine has no applicable international agreement or where an existing agreement does not provide for the inclusion of such periods. These periods are taken into account on a calendar basis, provided that they are recognized as part of the relevant employment or insurance record under the legislation of the foreign state. The procedure for confirming such periods is to be determined by the Cabinet of Ministers of Ukraine.

Law No. 3674 also introduces amendments to the Law of Ukraine “On Pension Provision for Persons Discharged from Military Service and Certain Other Persons” concerning the calculation of years of service.

Pension provision may also be governed by international agreements that generally operate according to two different principles:

• Territorial principle (Azerbaijan, Armenia, Georgia, etc.): the pension is granted under the legislation of the country of residence, taking into account periods of employment acquired in the territories of the countries participating in the relevant agreement.
• Proportional principle (Bulgaria, Spain, Latvia, etc.): each country grants and pays a pension for the periods of insurance or employment acquired under its own legislation.

The new law clarifies the rules for taking into account periods of employment abroad when granting pensions in Ukraine, particularly following Ukraine’s withdrawal from the CIS Agreement and the denunciation of the agreement with Belarus. For Ukrainian citizens who have worked abroad, it is important to consider the provisions of the relevant international agreements, as well as the procedures established by Ukrainian legislation for confirming foreign employment periods and determining whether pension payments are being made by another state.