UKRAINE - Ukraine's opposition party is set to challenge a recently passed pensions law in the Constitutional Court.

In a late vote on Thursday, parliament passed a new law that will hike the pension age for women from 55 to 60 years to bring it in line with that of the male working population, as well as create the framework for a second-pillar pension system.

The IMF and the World Bank have put pressure on the country to reduce its surging pension spending, which currently makes up 18% of GDP.

After the parliamentary vote, Yulia Tymoshenko, leader of the opposition party Batkivshchyna, said her party would ask the Constitutional Court to repeal the "illegally adopted" legislation, which she characterised a "criminal pension law".

The opposition criticised the fact only a handful of MPs issued a proxy vote for the majority of non-present colleagues to make up the more than 240 yes votes - this is against the constitution, but has been done before.

However, Tymoshenko conceded she did not expect the Constitutional Court - a "department of the presidential administration" - to issue a fair ruling.

The pension reform also includes an increase of the years of work experience needed to receive a pension from 30 years to 35.

Male civil servants will see their retirement age go up from 60 to 63 years, while the salary levels used to calculate pensions will be lowered from 90% to 80% for all civil servants.
Ukrainian investment company Dragon Capital noted in a letter to institutional investors that the adoption on the law supported all provisions required by the IMF.

It said: "This marks a huge positive step toward ensuring sustainability of Ukraine's public finances and improves the prospects for disbursement of the next $1.5bn (€1bn) tranche out of the IMF's $15bn lending package for the country."