The Ukrainian government intends to propose that the Verkhovna Rada improve the mechanism for the accrual and indexation of pensions to ensure that they keep pace with inflation, Prime Minister Mykola Azarov has said.

"The bill proposes improving the mechanism for the annual recalculation of previously accrued pensions by increasing the wage from which the pension was accrued by the coefficient corresponding to not less than a 20% increase in the average wage compared to the previous year, but not less than inflation growth," he said, while opening a government meeting on Wednesday.

Azarov said that the document would be discussed at a cabinet meeting on Wednesday.

He said that the adoption of this bill would lead to a significant increase in pensions and the establishment of equal conditions for the indexation of pensions, regardless of the law under which they were accrued.

The Cabinet of Ministers calculated that UAH 2.1 billion would be required this year to implement the document, given the growth of the average wage from which insurance premiums were paid and that these funds were envisaged in the budget of the Pension Fund.