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Two people with identical insurance records can receive significantly different pensions. The amount depends not only on the length of service but also on other factors, including official earnings and the individual salary coefficient.
How the old-age pension is calculated
Under Ukraine’s pension insurance law, the old-age pension is calculated using a formula that takes into account:
- the insured person’s salary;
- the insurance-service coefficient.
As a result, the final pension amount is individual and depends on both how long a person worked and how much they officially earned.
What salary is taken into account
For pension calculations, the salary indicator is determined using:
- the average salary in Ukraine for the three calendar years preceding the pension application;
- the individual salary coefficient of the insured person.
The individual coefficient represents the average ratio between a person’s insured earnings and the average salary in Ukraine for the corresponding months.
Which period of earnings is included
As a general rule, earnings are taken into account from July 1, 2000, based on data from the personalized pension-insurance system.
A person may also request that earnings for any 60 consecutive months before July 1, 2000 be included, provided those earnings can be confirmed with documents.
How the salary coefficient is calculated
For each month, the person’s insured earnings are divided by the average salary in Ukraine for that month.
Both the salary coefficient and the insurance-service coefficient are calculated to five decimal places.
How insurance service is calculated
Insurance service is calculated in months. The insurance-service coefficient is determined by dividing the total number of months of insurance service by 1,200.
New pension-service rules
Since August 2, 2026, periods of employment can be counted toward pension insurance service even when the employer accrued the required contributions and reported them but did not actually pay them.
Therefore, the same length of employment does not automatically mean the same pension: official earnings and the individual salary coefficient can make a substantial difference.
