Reform Index 264: Ukraine to Count Foreign Work Experience Toward Pensions

“Resolution No. 562 introduces the possibility of counting periods of employment abroad toward one’s pensionable work record — even if Ukraine does not have a formal agreement with the country in question. This work record is crucial for determining eligibility for an old-age pension. This is a significant simplification for millions of Ukrainians who worked abroad — whether due to war or long-term labor migration—but were unable to verify their work history through the established procedures. Without a clear mechanism, these citizens either lost their right to a pension or had to purchase qualifying service at their own expense. The resolution is intended to encourage citizens to return home.

The resolution outlines two separate procedures: one for recognizing employment periods in former Soviet republics before January 1, 1992, and another for confirming work experience in other foreign countries. Proof of foreign work history can be submitted through official documents such as certificates or extracts, or obtained via formal requests from the Pension Fund of Ukraine (PFU) and the Ministry of Foreign Affairs to foreign authorities. To confirm Soviet-era work experience before 1992, individuals may submit a declaration stating they are not receiving a pension from another country or provide an explanation for the lack of supporting documentation.

However, income earned abroad is not factored into the calculation of pension amounts — it only affects whether a person qualifies for a pension. There is also a risk of refusal or delayed responses from foreign authorities, which can complicate or delay the recognition of work experience. Additionally, the self-declaration mechanism regarding pension payments from other countries could be misused by bad-faith applicants.”

“In December 2023, the government began building an effective public investment management system. The goal was to create a transparent, strategically aligned, efficient public investment system with clear project selection, effective financing, and monitoring mechanisms. Following the adoption of the Reform Roadmap, pilot approaches were implemented throughout 2024 to establish the Strategic Investment Council, which is tasked with setting priorities for public investments, defining project selection criteria, and forming the Unified Project Portfolio through applications submitted via the DREAM platform. In January 2025, the government systematized these developments, and MPs adopted the proposed amendments to the Budget Code. To implement the new law, the Cabinet of Ministers approved several resolutions on February 28, establishing new approaches to public finance management. These reforms were structural benchmarks of the IMF Program, and their implementation enabled Ukraine to successfully complete the seventh and eighth reviews under the IMF Program.

In particular, on February 28, the government approved (officially published in the Uryadovyi Kurier newspaper on May 10 – ed.) the procedures for the preparation, evaluation, and implementation of public investment projects and programs at the national, regional, and local levels, as well as the procedure for forming the unified public investment project portfolio of the state (region, territorial community) and the sectoral (industry-specific) project portfolio of the state (region, territorial community). It also approved the procedure for developing and monitoring the implementation of the state’s medium-term priority public investment plan and preparing public investment projects and programs under the new methodology (starting in May 2025). 

The adopted changes are intended to support the implementation of a unified public investment management system. As a result, by increasing transparency and directing funds toward priority projects, the efficiency of spending on investment projects is expected to improve.

At the same time, the government has already begun to address several challenges. Among them are the limited capacity of local authorities and other stakeholders to prepare high-quality investment projects, as well as a lack of understanding of the reform’s purpose. To overcome these issues, the government will train communities, explain the reform to them, and establish project preparation offices. Capacity challenges also exist not only at the local level but within line ministries as well. Effective public investment management requires the development of a robust IT solution. Changes to the DREAM system are still ongoing. Another challenge lies in unreformed legislation and inefficient practices in the construction and public procurement of construction works, which diminishes participants’ interest in such tenders.”

“The government resolution adopted at the end of February, which regulates public investment management, was only published and entered into force in May.

 Since, according to the Action Plan for implementing the Roadmap for Public Investment Management Reform for 2024–2028, the year 2025 is a transitional period for introducing the new public investment management system, and work on medium-term budget planning and the preparation of budgets at all levels for 2026 must take these changes into account, a range of significant challenges lies ahead.

First, there are tight timeframes for preparing high-quality public investment projects. There is a risk that Ukraine may ‘repeat the same mistakes,’ as highlighted in the annual RDNA 4 report for 2024, which stated: “Line ministries and subnational authorities had less than a month to submit project proposals in line with the new guidance (set by Resolution No. 903…)… The limited time for preparation of project proposals undoubtedly impacted on quality: some projects are not yet aligned with stated priorities; and some are not implementation ready.’

Second, staffing on the ground is a critical issue. While a dedicated structural unit responsible for managing public investments can be created without increasing the overall headcount of local self-government bodies — by assigning additional responsibilities to existing departments—providing expert evaluations of public investment projects on the ground may lead to potential conflicts of interest.

Third, both the resolution and the Procedure for Preparing Public Investment Projects and Programs state that the new public investment management procedures are recommendatory for project preparation at the local level, and mandatory only if a project or program receives funding from the state budget. Since local initiatives must go through a lengthy process to access state budget financing, there is a risk of centralization of financial resources for reconstruction and development, as well as a potential decline in the absorption capacity of local self-government bodies.

The public investment management reform is highly ambitious. It is crucial to coordinate all stakeholders (local self-government bodies, regional state administrations, military administrations, sectoral ministries) and the expert community to make the process as smooth as possible for communities and regions, especially during the transitional phase. As early as this fall, a preliminary assessment of the reform’s implementation on the ground can be carried out, followed by a ‘lessons learned’ exercise.”

“Regulating the operation of the gas consumption database is a step toward implementing a requirement set out in the Law on Ensuring Commercial Metering of Natural Gas, which was introduced back in 2021.

These new approaches will give the government a clearer picture of both physical and commercial gas flows across all stages of the supply chain — extraction, transportation, distribution, storage, supply, and consumption. This, in turn, will support the development of policies aimed at improving market efficiency, optimizing infrastructure use, and providing targeted protection for vulnerable consumers.

The database will also help lay the groundwork for a competitive retail market once martial law restrictions are lifted. Since August 1, 2020, all household consumers have had the formal right to choose their gas supplier. However, Naftogaz currently has a de facto monopoly, and legislation prohibits upward price adjustments in line with market conditions. In particular, with the help of such a data hub, suppliers can analyze a potential new customer’s profile (including consumption history) and make informed decisions about whether to work with that customer. This, in turn, reduces the risks taken on by new suppliers and, consequently, lowers the commercial markup to some extent. In other words, if a series of market liberalization steps is implemented, the deployment of the database will ultimately benefit consumers.”