The key to receiving a decent pension for a seafarer is advance retirement planning, taking into account the laws and regulations of the jurisdictions with which the seafarer is associated.
The rights of Ukrainian sailors to retire are often covered with myths and innuendo, which becomes the reason for her careless expectations and the unexpected realization of her absence or not using the right to retire due to ignorance of its existence. Early retirement planning is the key to a decent retirement, especially for seafarers, which we will discuss in more detail below. Many people use Self Manager super fund to create a super saving and fund for their retirement.
General information about the pension
Since January 1, 2004, a three-tier pension system has been in effect in Ukraine, in which the calculation of pensions is carried out on the basis of insurance (and not labor) experience, that is, from the time during which the unified social contribution (ERU) or pension contributions were paid.
Level I – solidarity system: pension contributions are transferred to current pensioners, based on the insurance experience upon reaching the retirement age. The size of the pension is determined in the range from 1,564.00 to 15,640 hryvnia (as of July 2019).
Level II – accumulation system: pension contributions are credited to the personal “pension account” of the insured person. Pension payments are made monthly upon reaching the retirement age and until the end of life, but not less than ten years. It is assumed that 10% of the amount of pension contributions will be transferred to the accumulation system. If the amount on the personal account is insufficient to make pension payments, then the insured person must be paid a lump sum. Pension payments in the funded system are subject to inheritance in accordance with Part 3 of Article 56 of the Law of Ukraine “On Compulsory State Pension Insurance” (Law).
The accumulative system has been legislatively provided for since 2004, and it was expected that it would start working on January 1, 2019, but its introduction was postponed for an “indefinite period” – until the adoption of the Law of Ukraine “On Compulsory Accumulative Pension Provision”.
III level – non-state pension insurance on the basis of an agreement with a non-state pension fund. Today, more than 60 non-state pension funds are registered in Ukraine, in which over 600,000 people are insured.
Since Ukrainian seafarers are in most cases officially employed abroad and their employers are foreign shipowners, the question arises about the possibility of seafarers receiving pensions in Ukraine.
Compulsory pension insurance is not applied to seafarers who are not employed by Ukrainian employers, who are not registered as entrepreneurs. That is, upon reaching the retirement age, such seafarers do not receive the right to a pension.
In practice, the lack of the right to a pension for seafarers often comes as a surprise, despite the fact that detailed information on the mechanism of participation in the system of voluntary state compulsory social insurance must be provided to seafarers by crewing with assistance in their employment, which is provided for by subparagraph 11 of paragraph 9 of the Licensing conditions for carrying out economic activities on mediation in employment abroad, approved by the Resolution of the Cabinet of Ministers of Ukraine dated December 16, 2015 No. 1060. However, sailors often begin to take an interest in this issue when time has already been lost.