January the 17th, 2022 - As if the 2021 Croatian census results weren't damning enough for the country now numbering less than four million inhabitants, now it has emerged that of those inhabitants, almost every third person is drawing their pension.

As Index/Vedran Salvia writes, here in Croatia, the number of insured persons on the 30th of November, 2021, stood at 1,583,131. The number of pension beneficiaries in that same month of November was 1,234,991. The ratio of the number of pension beneficiaries and insured persons is 1: 1.28.

In other words, if we take into account that, according to published data from the Central Bureau of Statistics, Croatia has a population of 3,888,529, this means that practically every third person in Croatia is retired and drawing their pension.

Of course, the number of those who receive their pensions abroad should also be taken into account, and according to the Mirovina.hr portal, back in October 2021 there were a total of 181 thousand of them. However, the bigger picture doesn't change that much.

The number of older employees is growing

Index contacted economic analyst Andrej Grubisic (who answered some more 2021 Croatian census questions here), who pointed to the research piece entitled "An analysis of the Croatian pension system (with proposed adjustments) and global trends in private pension savings", which was prepared by Grubisic and his partners for the Association of members of mandatory and voluntary pension funds.

Among other things, this study states that within the age structure of employees, negative changes are also visible in the form of increasing growth in the number of older employees who are expected to retire soon, while the number of younger employees (as a share of total employees) is declining.

"The existing macroeconomic and demographic foundations don't indicate the possibility of a significant improvement in the ratio of insured persons and beneficiaries in the next 5-10 years," the research states.

These changes in the decline in population and working capacity, with currently extremely low levels of activity and employment compared to other European countries and low GDP "per capita" indicate an additional burden on the existing pension system in the form of limited potential for significant growth in contributions to the coverage of current pensions, and in particular, it all has a negative impact on the possibility of a significant increase in the pensions of existing retirees in terms of real purchasing power,'' the study said.

Reduce contributions for the first pillar...

The research also proposes adjustments to the existing system, ie it is stated that from the year 2024, contributions made to the first pillar should be gradually reduced until in 20 years they fall from the existing 15 percent of a person's gross salary down to 5 percent of it. It also states that allocations for private pension savings should be increased. This is so that the allocations from 2024 would increase from the existing 5 percent of gross salary in a period of 20 years to 15 percent.

The proposals also imply that members of mandatory pension funds should have financial resources at their disposal, but also that those financial assets should be inherited after the death of the beneficiary.

For more on the 2021 Croatian census results, make sure to check out our lifestyle section.