Labour Minister Blames Opposition for Retirement Age Increase

Total Croatia News

ZAGREB, April 29, 2019 – Labour and Pension System Minister said on Sunday that launching a petition for a referendum against the statutory pension age of 67 is a democratic right supported by the government, however, this statutory retirement age has been existing in Croatia for five and a half years and was introduced by the government led by the Social Democratic Party (SDP).

“Then (when it was introduced) there were no protests or referendums, and earlier today, we could see the SDP leader Davor Bernardić sign this referendum petition, although he had voted for raising the pension age to 67,” the minister told the RTL commercial broadcaster.

“He (Bernardić) recently apologised for that policy (of his party). I believe that it may happen that he will apologise for the entire term of the Milanovic government,” said Pavić, referring to the SDP government led by the then SDP leader Zoran Milanović whom Bernardić succeeded at the SDP helm.

“The policy of this government is to invest maximum effort to make pensions higher. We have raised them by 7.45%, and as of 1 July, the lowest pension allowances are going up by 3.13%, we have reinforced the second pillar and settled many issues and preserved the stability of the public finances,” the minister said.

Those who have been longer employed have the average pension of 4,500 kuna and we have set the target to enable people to stay longer on the labour market, and they can go into retirement at the age of 60 if they have 41 years of service, Pavić said.

He recalled that in Croatia the average length of the years of service before retirement is 30 years and 2 months as against the average of 35 years in Europe and 37 years in Germany.

Pavić said that credit rating agencies and the European Commission have praised the government’s pension reform as good, and reiterated that a success of the unions’ referendum against the reform would mean lower pensions and more borrowing.

The Moody’s credit rating agency, which on Friday changed Croatia’s outlook positive and affirmed its ratings at Ba2, says that “in the medium-term, the pension reform enacted in late 2018 will contribute to the fiscal sustainability of the system while ensuring better pension adequacy.”

“The acceleration in the planned increase in the statutory retirement age to 67, coupled with the equalization of retirement age for men and women, will support the decrease in public pension expenditure expected by the European Commission’s 2018 Ageing report (-3.8% of GDP in 2070 compared to 2016). The supplement granted to multi-pillar pensioners will help to improve the low pension adequacy,” Moody’s says.

Three union federations – NHS, SSSH and MHS – early on Saturday morning started collecting signatures for a referendum on changes to the Pension Insurance Act. The union federations want the government to restore the retirement age to 65, to set the age for early retirement at 60, and to reduce penalties for early retirement from 0.3% to 0.2% per month of early retirement, as well as to extend the transitional period for equalising the statutory retirement age for women and men.

More news about the pension system can be found in the Business section.


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