Pension Indexation in Ukraine: How to Challenge an Incorrect Recalculation

Pension indexation remains one of the most problematic issues in relations between pensioners and the Pension Fund of Ukraine. Despite the clear requirements of Part 2 of Article 42 of the Law of Ukraine “On Compulsory State Pension Insurance”, in practice the Pension Fund continues to apply outdated average salary indicators or replaces full indexation with fixed supplements. Our client, Ms. Hladchenko, encountered precisely this situation.

Ms. Hladchenko was granted an old-age pension in August 2023. When calculating her pension, the average salary indicator for 2020–2022 in the amount of UAH 12,236.71 was applied. Under the Law, this is the indicator that should be increased annually from 1 March by applying the indexation coefficients established by the Cabinet of Ministers of Ukraine.

After reviewing the Supreme Court judgment dated 13 January 2025 in case No. 160/28752/23, which found the practice of replacing indexation with fixed supplements to be unlawful, Ms. Hladchenko reviewed her own pension file. The analysis revealed significant violations: in 2024, instead of applying the coefficient of 1.0796, she was granted a fixed supplement of UAH 100, while in 2025 an understated coefficient of 1.0345 was applied instead of the legally required coefficient of 1.115.

Thus, the Pension Fund effectively indexed the claimant’s pension not on the basis of the correct average salary indicator applicable to her pension, but using an outdated indicator for 2014–2016. As a result, the basic salary indicator was not properly increased and the amount of the pension remained substantially understated.

After applying to the Pension Fund for a recalculation, Ms. Hladchenko received a refusal based on formal references to compliance with subordinate legislation. In response, we filed an administrative claim in which three key circumstances were established.

First, indexation must be applied to the specific average salary indicator that was used when the pension was originally granted, rather than to a notional indicator fixed as of 2017.

Second, the Law does not provide for replacing indexation with fixed supplements. Such practice is inconsistent with Article 42 of Law No. 1058.

Third, Procedure No. 124 may be applied only insofar as it does not contradict the Law, as expressly stated by the Supreme Court.

The court of first instance fully upheld the claim: it declared the Pension Fund’s decision unlawful and ordered a pension recalculation using the coefficients 1.0796 and 1.115, beginning from October 2024. The appellate court upheld this judgment without changes, confirming the unlawfulness of the pension authority’s actions.

The practical significance of the Hladchenko case is that it once again confirms that pensioners whose pensions were granted from 2020 onward may be entitled to indexation based on the average salary indicator actually used when their pension was calculated. Even where the Pension Fund has ignored statutory requirements for years, judicial protection remains an effective mechanism for restoring violated pension rights.

The court judgments are available at the following links:

Court of first instance – https://reyestr.court.gov.ua/Review/128326192. 

Court of appeal – https://reyestr.court.gov.ua/Review/131799340.