ZAGREB, January 2, 2019 – The pension reform which went into force on January 1 envisages raising the retirement age to 67 as of 2033, penalising early retirement by 0.3% per month, i.e. by 18% for five years, and enabling all pensioners to work four hours a week while keeping their pensions.
Second pillar beneficiaries can choose in which system to exercise their pension – only in the first pillar with a 27% supplement for the period up to 2002, plus 20.25% for payments after that year; or from both mandatory pillars.
Between the two readings in parliament, the pension legislation package went through certain changes – penalisation for early old-age pension was cut from 0.34 to 0.3% monthly; the full retirement age is to be lowered by six months for mothers and women who adopt for every child, which will increase their pensions by about 2%.
In order to reinforce the sustainability of the pension system, the equalisation of old-age retirement for women and men is being stepped up by four months per year. Women are now required to retire with 62.4 years of age until the end of 2026.
As of 1 January 2027, both men and women will be eligible for old-age pension with 65 years of age and 15 years of service for retirement.
As of 1 January 2028, the age for both will be raised by four months per year until 1 January 2033, when both will be eligible for old-age pension with 67 years of age and at least 15 years of service for retirement.
The reform brings change also in the operation of mandatory pension funds with a view to achieving more transparency and control. The reform envisages the appointment of insuree representatives to the funds’ supervisory boards as well as the obligation of the funds’ management board members to step down from supervisory boards in companies in which they have ownership stakes.
Pension funds can also invest in startups and infrastructure projects, and the reforms also cuts the compensation for running them.
As of January 1, the net monthly minimum wage rises from 2,752 kuna to 3,000 kuna, by 9% in comparison with 2018. According to the government, this is the biggest one-off minimum wage rise since 2008.
More news on Croatia’s pension system can be found in our Business section.
