ZAGREB, April 24, 2018 – The Croatian Pensioners’ Union (SUH) on Tuesday criticised the announced pension scheme reform, branding it as the continuation of the privatisation of the pension system to the detriment of pension recipients.
The union calls on the government to revoke the mandatory second pillar of pension contributions and halt the impoverishment of senior citizens.
The union expresses fear that Labour and Pension System Minister Marko Pavić will allow the weakening of the first pension pillar, based on inter-generational solidarity, with the strengthening of the second pillar in parallel, which amounts to the continuation of the privatisation of the pension system.
The union accuses media of refraining from disseminating the truth that in western European democracies there is no scheme that includes a second pillar for pensions. such has been introduced by the World Bank in post-Socialist countries and that paying contributions into the second pillar will be worthwhile provided that the contributor earns a monthly salary twice as high as the average one.
The SUH describes the situation with pension recipients as disastrous, underscoring that 315,000 recipients that account for 27.6% of all pensioners receive pensions lower than 1,500 kuna a month. Furthermore, as many as 600,000 pensioners have monthly pensions below the monthly income marking the poverty line, 2,180 kuna per month.
There are over 1.2 million pensioners in Croatia, the population of which is about 4.2 million.
The average pension is 3,317 kuna and the average pension to average salary ratio is a mere 37.46%. For instance, this ratio in Hungary and Macedonia is 62%, while in Slovenia it is 60.2%, Montenegro (56.2%), Serbia (49.8%) and so on.
In Croatia, every one in three citizens aged above 65 is at risk of poverty, which is 1.8 times more than the EU average.
