ZAGREB, September 20, 2018 – Labour and Pension System Minister Marko Pavić said on Wednesday in parliament said that the government’s aim was for people to retire with as long a working life as possible which would mean that their pension allowances would be higher and called on unions for another round of talks so that he can better explain his reasoning for this.
The proposed comprehensive pension reform is aimed at long-term sustainability of the pension system so in addition to extending working life to 67 as of 2031 already, it introduces harsher penalties for early retirement and provides the option for people born after 1962 to choose whether they wish to remain in both pension pillars or to transfer their savings to the first pension pillar.
In response to claims that compulsory pension funds consider that everyone should be eligible for the 27% supplement and not just those people who opt to transfer their savings from the second pillar to the first, Pavić said that the question of the 27% supplement amounted to about 40 billion kuna by 2040.
“This government is responsible and doesn’t wish to pass the debt on to the following generation. We want to find a sustainable way to finance that,” Pavić said. “We will find a solution that will head in the direction for future pensioners to have a higher pension, at least on par to those now.”
The minister touched on the dissatisfaction of unions who walked out of the first meeting with him because he did not accept their recommendations, one of which was to reduce the pension eligibility age. “In reality the majority of citizens will work until the age of 61 or 65 because of the existence of the institute of long-term insurees. The average working age is 30 years and the government wishes to extend that to 40 years. Anyone who has a working age of 40 years will be eligible to retire earlier,” Pavić explained.
“I publicly call on unions to once again sit down at the table. The government is investing in strengthening the unions because we wish to strengthen social dialogue. I am inviting them to once again explain my reasoning,” the minister said.
“This aim of this government is for people to retire with as long a working life as possible so that they will have a higher pension. Pensions will certainly not fall. We had a record increase in pensions this year of more than six percent,” Pavić noted.
He also responded to the dissatisfaction of the junior coalition partner – HSLS – over the reform and added that there were still some outstanding issues, however, he concluded that they had thrashed out almost the entire package, which too proposes a 3% increase of the minimum pension.
