What is pension indexation.


The mechanism of indexation of pensions operates in many countries, and there are logical reasons for this. Prices for goods and services are rising, which is inevitable, so a compensation mechanism is needed. The main goal of indexation is to support purchasing power. In Ukraine, indexation is regulated by legislation to protect pensioners from the depreciation of their incomes. This mechanism is important, especially for pensioners who depend on pension payments. Pension indexation is carried out annually according to the standard procedure. The indexation coefficient is determined based on the consumer price index and the average wage. After that, pensions are increased according to this coefficient. During wartime, pension indexation remains an important task for the state. Legislation on indexation remains in force, and the procedure for indexation is not changed.
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