What’s the perfect age to retire and who gets to determine it?
Instead of an early retirement at 60 years of age, in a few years, Croatians will probably have to wait for another two years before they become eligible for it. The European Commission is suggesting to Croatia to penalize early retirement, and the government said it will present its reform plan by mid-April, including items related to the pension system, reports Večernji List on March 8, 2016.
According to a recently published report, Brussels believes that the five-year difference between the early retirement age and normal retirement age is too big in comparison to the EU average by less than three years. The European Commission would not increase monetary penalisation, as Croatian pensions are already the lowest in the EU when compared to salaries, but it would reduce the difference between the early retirement and full retirement from five to maybe three years. Last year, 12,000 workers opted for the former.
Men can apply for full retirement at 60 (with enough pensionable service) and women when they turn 56 years and three months. Each year the minimum age requirement for women is set to increase by another three months until they balance out with men.
Those who retire five years before they are eligible for full retirement will see their pensions permanently lowered by 6 do 20.4 percent, depending on the pensionable service. Croatia has changed the formula for early retirement penalisation two years ago. The European Commission also noted “positive trends” related to a decrease in numbers of early retirees. This is probably the reason it did not emphasize the financial penalisation in its report.
Croatia is not the only EU member where the difference between the early retirement age and full retirement age amounts to five years – there are eight such countries – but what the EC is concerned about is that the average pensionable time of 32.3 years is the shortest in the EU (35.3 years) and it keeps decreasing since the crisis started, especially among men.
Every time Croatian companies are faced with adversities, they first start cutting those workers who are eligible for early retirement, because they know these people will have something to live off. In Austria, men are eligible for early retirement at 62, in Hungary and Germany at 63, while in Belgium, the Czech Republic, Estonia, and Greece the age requirement is 60, similar to Croatia’s requirement for men.