Triglav has taken over the payment of pensions from the second and third pillars of the retirement system.
The Slovenian insurance company Triglav has taken over the payment of pensions from the second and third pillar of the retirement system from Raiffeisen Bank, which could be just the beginning of significant changes in the pension industry. Industry watchers expect that banks will let insurance companies get more of the retirement market, reports Večernji List on April 28, 2018.
The majority of retirement savings of Croatian citizens is controlled by pension fund management companies, which are currently owned by the largest banks: Zagrebačka Banka, PBZ, Erste and RBA. They have more than a hundred billion kuna to invest. These are funds which workers pay in the system while they work.
On the other hand, pension insurance company become important after an employee is retired. Croatia has just one pension insurance company – the Raiffeisen Pension Insurance Company (RMOD), which has now been taken over by Triglav. All the funds which workers pay in during their career, together with the profits earned by the pension funds, are transferred to the pension insurance company which then takes care of paying the monthly pension to the pensioner.
A more significant increase in the number of pensioners from private funds is not expected for another decade, provided there are no radical interventions in the pension system which would lead to the nationalisation of the private retirement savings system.
RMOD currently pays approximately 11,500 pensions, out of which only 276 are pensions from the second (mandatory) pillar, while the rest are pensions from the third (voluntary) pillar. “In view of demographic trends and pension system reforms expected in the coming years, a significant increase in the number of new beneficiaries is expected in the next few years,” said Triglav.
Triglav is not an unknown company in Croatia, and its market share in the insurance segment is somewhat less than five percent. The company still needs to explain its motives for entering the sensitive area of paying pensions to workers. Croatia launched a pension system reform some twenty years ago, but many things have been changed in the meantime, including regulations which have influenced the number and amount of pensions paid from private pension funds.
Triglav is majority owned by the Slovenian government, but the Adris Group from Rovinj has been trying to take it over for years. So far, it has managed to buy about six percent of shares.
RMOD pointed out that up to now around 24,000 pensioners have decided to have their pensions paid to them and that many of the beneficiaries from the voluntary pension funds (third pillar) have already fully received their pensions. On the other hand, some of the recipients from the second pillar have opted to return to the state-owned Croatian Pension Insurance Institute (HZMO), which manages the first (mandatory) pillar, because that has enabled them to receive higher pensions.
Translated from Večernji List (reported by Ljubica Gatarić).
