ILO, Ukraine Advance Pension and Labour Reforms to Build Modern Social System

Reflecting on the overall reform agenda, Schwarzer reiterated that decisions made today will shape social and economic stability for decades.

The International Labour Organization (ILO) has deepened its cooperation with the Government of Ukraine as the country works to strengthen its social protection and labour systems amid ongoing reconstruction challenges and its path toward European Union integration. During a series of high-level meetings in Kyiv, the ILO and Ukrainian officials discussed strategies to build a modern, financially sustainable, and inclusive social protection architecture capable of supporting both people and economic recovery.

Building a Forward-Looking Social Protection System

A central meeting took place between the ILO delegation and Denys Ulutin, Ukraine’s Minister of Social Policy, Family and Unity. Minister Ulutin outlined the government’s vision for a “contemporary, sustainable system that supports people and the economy”, stressing that social policy must move beyond providing benefits to creating conditions that enable societal and economic development.

He emphasized that Ukraine’s reform agenda aims to ensure long-term resilience, equity, and efficiency in the delivery of social protection services—an urgent task as the country continues to confront the impacts of war, population displacement and significant demographic shifts.

Addressing the Pension System’s Long-Term Sustainability

During the discussions, Helmut Schwarzer, ILO Senior Specialist on Social Protection, presented the preliminary findings of the ILO’s analysis on the financial sustainability of Ukraine’s solidarity-based pension system.

The analysis points to several long-term structural challenges:

• Demographic decline, including accelerated emigration and an aging population

• A shrinking contributor base, intensified by war-related displacement and labour market disruption

• Reduced employment formalization, a key factor limiting fiscal contributions

• Increased pressure on pension expenditure, as economic instability affects both government revenue and population wellbeing

Despite these challenges, Schwarzer noted that systemic reforms can stabilize the pension system, ensuring it remains aligned with both international standards and Ukraine’s aspirations for EU integration.

He emphasized that reforms guided by ILO Convention No. 102, which Ukraine has ratified, can strengthen sustainability, expand coverage, and improve the adequacy of pensions—three pillars essential to meeting the needs of current and future generations.

Reforming in Line with EU Integration Goals

Aida Lindmeier, Director of the ILO’s Country Office for Ukraine, highlighted that pension reform is increasingly linked to broader EU accession benchmarks. She emphasized the need for coherent and well-coordinated reforms that enhance institutional capacity and ensure compliance with international legal standards.

“Our efforts are focused on supporting the Ministry to reform its pension system in line with ILO Convention 102, so it is inclusive, resilient and beneficial for its people,” Lindmeier stated. “For that, we must work on several enablers, including the transition to formality.”

Formalizing employment, improving labour market participation, and enhancing employer compliance were identified as essential reforms that will strengthen Ukraine’s pension finances in the long term.

Strengthening Labour Market Institutions

The ILO delegation held additional meetings with the State Employment Service and the State Labour Service, focusing on key labour market challenges such as:

• Labour inspection capacity

• Occupational safety and health

• Informality in the labour market

• Reintegration of displaced and returning workers

• Compliance with labour standards

• Barriers to labour market participation for vulnerable groups

The ILO also met with trade unions, employers’ associations, and civil society groups to gather insight into workplace trends and labour market needs. These consultations highlighted concerns related to wage arrears, unsafe working conditions, shifting skills requirements and the broader economic pressures caused by the full-scale invasion.

Ensuring Coherence Through International Partnerships

Recognizing the complexity of Ukraine’s reform landscape, the ILO also held coordination discussions with the World Bank and UNICEF. These engagements aim to ensure that analytical work, reform proposals and technical assistance remain aligned and evidence-based, avoiding duplication and ensuring maximum support for Ukrainian institutions.

The agencies agreed to continue coordinated efforts in areas such as social protection modernization, labour market integration for displaced households, child benefits reform and digitalization of employment services.

Pension Reform as a Foundation for Long-Term Recovery

Reflecting on the overall reform agenda, Schwarzer reiterated that decisions made today will shape social and economic stability for decades.

“In advancing pension reform, Ukraine should ensure sustainability, coverage, and adequacy—the three pillars of a fair and resilient system,” he said. “These principles provide essential guidance for Ukraine’s reform path. Decisions on pensions are not only about today’s retirees—they will determine the wellbeing of generations to come.”

A Path Toward a Stronger, More Resilient Ukraine

As Ukraine continues its fight for sovereignty and prepares for long-term recovery, strengthening its social protection and labour systems is emerging as a national priority. The ILO’s ongoing partnership with the Government of Ukraine reflects a shared commitment to building systems that protect people, empower workers, and promote economic resilience—core foundations of sustainable development and future EU membership.