Government sends pension reform bills to parliament

Government sends pension reform bills to parliament

Government sends pension reform bills to parliament Izvor: Pixabay (ilustracija)

The government on Wednesday sent a package of bills to parliament for the comprehensive pension reform, following four months of negotiations with social partners.

Labour and Pension System Minister Marko Pavic said that current pensioners can expect further increases in their pension allowances, while future pensioners can expect the second pension pillar to strengthen, the investments to increase in that pillar and that everyone will be able to select the most favourable option to use those funds upon retiring.

The pension reform package consists of six bills relating to pension insurance.

"I would like to assure current pensioners that the payment of pension allowances is not in question and that they can expect their pension allowances to continue to grow and that they need not worry about their pensions," Pavic said at the cabinet meeting.

After pensions increased by 6.39 percent during the first two years of this government's term, a similar growth can be expected next year, he said, adding that 248,000 pensioners with the lowest pensions will receive an increase of 2.13 percent as of July 1 next year, as part of regular indexation.

"There is no talk of the second pension pillar being nationalised or abolished. In fact, we want to strengthen it. Citizens can at any moment choose what is best for them. We are paying particular attention to the 300,000 pensioners receiving the minimum wage or 80 percent of the average wage and who, if they remain in the second pillar, will not receive even the minimum pension," Pavic said.

As far as raising the retirement age to 67 and penalising early retirement, Pavic said that a law adopted in 2014 set the 67 retirement age to be introduced as of 2038, seeing that the pension system today has a deficit of 17 billion kuna (€2.3 billion), and only 19 percent of pensioners had a working life of 40 years.

Even though the initial proposal set the 67 retirement age to come into effect as of 2031, after negotiations with the unions, a compromise has been reached and the 67 retirement age will come into force as of 2033.

"I once again have to assure citizens who enter the labour force at the age of 18, waiters, sales persons in stores, nurses and so on, they will be able to retire when they turn 60 if they have a working life of 41 years. People who continue their studies and enter the labour market aged 24, will be able to retire when they turn 65 while only those people who do not have a working life of 41 years will not be able to retire until they turn 67," he said.

Meanwhile, the leaders of three union federations gathered outside the parliament building on Wednesday, calling for people to attend the protest against the reform bills, which is to be held in downtown Zagreb on Saturday.

With its pension reform bills, the government is meeting all the requirement set by the European Commission and the World Bank, but clearly Croatian citizens are not that important, unionist Kresimir Sever said.

Sever said unions were already preparing a question for a referendum, adding that a signature collection campaign could start in a month.

Asked about a turnout they expected on Saturday, Sever said they expected some 5,000 to 6,000 people.

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