• A complete transition is being made to self-service of citizens in private pension funds (Ukrainian and foreign) and to other ways of self-sufficiency in passive incomes in old age. Such passive income may include income from own real estate, dividends received from commercial enterprises, royalties and stock market shares. Substantial assistance in retirement age may be material assistance to children and other relatives.
• To accelerate the accumulation of funds in private pension funds, citizens are advised to transfer to their pension accounts also the funds that they will receive in the process of privatization of state property - enterprises, land, real estate and other state property.
• The state pension will continue be paid, but only to those who already received it at the start of the reform. In addition, the state pension (in the form of basic social assistance in old age) will also be paid to those who do not have time to accumulate a pension in a private pension fund before retirement. That is, those who will retire within 15 years from the start of reform.
• The size of the state pension paid to current pensioners will not change, but will increase (indexed) annually by the amount of inflation.
• The size of the state pension, which will be paid to those who retire within 15 years of the start of the reform, will be the same for all who retire during this period. And it will annually increase (index) by the size of inflation.
• The state pension will be paid without any additional conditions. It will be paid even if the pensioner continues to work or has other additional sources of income. In other words, the state pension will be paid to the citizen regardless of his financial condition.
• The state pension will be paid directly from the budget. Therefore, the pension fund is being liquidated.
• At the beginning of the reform, a full verification of all current pension payments is carried out - verification of the fairness of their accrual with subsequent cancellation for those who unreasonably receive assistance from the state.
• 15 years after the start of the reform, the state pension ceases to be granted. After this period, all citizens retiring can only rely on the income that they themselves have taken care of in advance - pensions independently accumulated by them in private pension funds and other sources of income.
• Despite the fact that all citizens will be obliged to take care of themselves in advance in order to have passive income sufficient for life at an advanced age, and the state will not provide anyone with any pension or any other irreversible social benefits for old age. However, those who require it will be able to use state pension loans. 

The rules for obtaining state pension loans by citizens of retirement age:

• The citizens of retirement age who have reached retirement age and for some reason have temporarily or permanently been left without means of subsistence can freely open a pension account in any bank (the bank checks only citizenship and age) and receive a pension loan on it monthly in the amount established by law . The size of such a loan and the interest rate are the same for all its recipients.
• The recipient of a pension loan is obliged to repay it, including interest accrued on it.
• Social Credit Repayment Rules:

1. The loan is returned by the recipient on his own when he has such an opportunity and desire;
2. When any amount is credited to any account of the loan recipient (except for a pension credit account), up to 50% is automatically deducted from the credited amount to repay the debt. The funds remaining in the account after automatic debiting, the account holder freely disposes of in accordance with the general rules of taxation. If desired, he can voluntarily use them for additional repayment of debt on previously received tranches of a pension loan;
3. Upon sale/purchase of real estate and property equivalent to it (or upon inheritance transfer), the entire amount of the debt on received pension loans is returned to the loan recipient;
4. In case of the death of the recipient of a pension loan, the loan debt is returned by the heirs of his property. Each heir reimburses part of the loan, in proportion to the share of the inheritance that he receives. In the absence of heirs or their refusal to receive an inheritance, the loan shall be repaid at the expense of funds received by the state from the sale of the unclaimed part of the inheritance in an open auction;
5. The amount of a pension loan remains unrecoverable after the death of its recipient due to lack of inheritance or insufficient value is written off as bad debt.

• Fundamental differences of a pension loan from a regular bank loan:

1. A pension loan is issued from the budget. Banks only agents for administering such loans.
2. A pension loan can be obtained by any citizen of Ukraine who has reached retirement age. This does not require any permission, collateral, guarantor or good credit history.  
3. The recipient of a pension loan receives a new loan tranche every month, even if there are unpaid previous tranches.
4. In practice, a pension loan is repaid only when the recipient has the funds to repay the loan. At the same time, specific maturities are set.

In general, the rules for the provision of state social assistance in the form of a pension loan are drawn up in such a way that all people of retirement age who really need it will be able to receive the financial assistance they need monthly, guaranteed and without any bureaucracy. On the other hand, such rules make it unprofitable to receive such assistance for those who are in dire need of it. In addition, since such financial assistance will, in fact, be distributed thanks to market mechanisms, rather than a bureaucratic decision, a large number of government officials will not be needed to administer this process.

Note: The application of such rules for the provision of financial assistance may lead to the fact that private banks will be interested in issuing pension loans. What can further reduce the corresponding expenses of the state and, consequently, the tax burden on the economy.