ZAGREB, 8 Feb 2022 - The Croatian Pension Insurance Institute had just over 1.56 million insurees on 31 January, up by 37,200 on the year and down by 30,000 from 31 January 2020.

The largest number of insurees was in manufacturing, just over 245,600, which was 5,000 more than at the end of January 2021 and 2,000 more than at the end of January 2020.

Wholesale and retail were next with 238,700 insurees, 4,300 more than at the end of January 2021 and 1,400 less than at the end of January 2020.

The highest increase in the number of insured persons compared with the end of January 2021 was in scientific and technical activities, by 5,600.

In energy supply there were 4,900 more insurees and in construction there were 4,600 more. Construction had 10,900 more insurees than at the end of January 2020.

In information and communication, there were 6,100 more insurees than at the end of January 2020 and 4,100 more than at the end of January 2021.

All of the above sectors had more than 100,000 insured persons.

In education there were 122,700 insurees, 3,800 more than at the end of January 2021 and 5,500 more than at the end of January 2020.

There were 119,100 insurees in public administration and defence, 2,500 fewer than at the end of January 2021 and 3,300 fewer than at the end of January 2020.

There were 114,700 insurees in healthcare and social welfare, 3,000 more than at the end of January 2021 and 4,000 more than at the end of January 2020.

ZAGREB, 24 Jan 2022 - The total assets managed by mandatory pension funds reached HRK 133 billion at the end of 2021, up by HRK 14 billion on the year, the UMFO association of pension funds  and pension insurance companies said on Monday, adding that pension funds have earned their insurees HRK 50.9 billion to date.

At the end of 2021, mandatory pension funds had 2,111,192 insurees, or 53,801 more than at the end of 2020.

Of them, 1,899,623 were in category B, which is for insurees in the middle of their career and has medium-risk investment; 150,266 were in category A, which is for younger insurees and has the highest investment risk; and 61,303 were in category C, for insurees who are about to retire and has the lowest investment risk.

Thanks to a recovery of the capital market, the average yield for category A insurees in 2021 was 13.52%, and 7.78% since its establishment, for category B it was 7.37%, and 5.51% since its establishment, and for category C it was 0.43%, and 4.48% since its establishment.

At the end of 2021, there were almost 67,000 more insurees in category A than the year before, the UMFO said, adding that this was due to the 2018 amendments to the law on mandatory pension funds as well as higher financial literacy.

The structure of mandatory pension funds' portfolio is diversifying, the UMFO said, with sovereign bonds accounting for 63.8% of the portfolios at the end of 2020 and for 57.7% at the end of last year.

Domestic shares accounted for 10.7% of the portfolios at the end of 2020 and for 12% at the end of 2021, while foreign companies' shares accounted for 9.2% of the portfolios, up by 17.7%.

At the end of last year, 397,253 citizens made voluntary pension contributions and the net assets totalled HRK 7.8 billion, up 15.8% on the end of 2020.

At the end of 2021, eight open voluntary pension funds were active in Croatia with 351,251 insurees as well as 20 closed funds with 46,002 insurees.

Among citizens with 11 to 20 years of service, 30.6% wish to save in the third pension pillar while 27.4% would like to invest in real estate.

As for citizens with less the ten years of service, 31% wish to invest in real estate and 23.3% in the third pillar, UMFO said, adding that only 5.1% of them would invest in securities and less than 10% would keep the money at home.

(€1 = HRK 7.5)

ZAGREB, 20 Aug, 2021 - The indexation of pension allowances on 1 July will lead to their rise by 2.46%, which means that the average increase will be 68.93 kuna, with the lowest pensions going up by HRK 42.77 and the the highest by HRK 180.47, the Večernji List (VL) daily reported on Friday.

Pensions are indexed twice a year, on 1 January and 1 July, to account for increases in living costs and to be adjusted to changes in the gross average monthly pay. The latest calculation of these two variables paves the way for the 2.46% increase in pension allowances as of 1 July.

In July, there were 1,143,592 pension recipients in Croatia, and the average pension was HRK 2,581.99.

17.5% increase in pension allowances since October 2016

Since October 2016, the average pension has increased by 17.5%, the Zagreb-based daily reported.

The lowest pension, HRK 1,738.48, is currently paid to 270,495 beneficiaries.

A total of 1,752 recipients get pensions in the amount of HRK 7347.17. Their allowances have increased by HRK 1,376 kuna since October 2016.

 (€1 = HRK 7.5)

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ZAGREB, 6 July, 2021 - The Croatian Pension Insurance Institute (HZMO) said on Tuesday that the number of pension insurance contributions had been on the rise for five months in a row, and the number of insurees was higher by 3.54% at the end of this June compared to June 2020.

At the end of this June, the contributions were paid by 1,596,112 insurees, or by 54,499 people more than the year before.

Broken down by sector, the highest number of pension insurees was registered in the processing industry (more than 246,000 people covered by insurance contributions).

The rise in the number of insurees has been registered in several sectors, for instance, in construction, IT, the hospitality industry and so on.

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ZAGREB, 6 July, 2021 - The Croatian Pension Insurance Institute (HZMO) said on Tuesday that the number of pension insurance contributions had been on the rise for five months in a row, and the number of insurees was higher by 3.54% at the end of this June compared to June 2020.

The government-sponsored amendments were forwarded to the parliament at the session of the Andrej Plenković cabinet on 1 July.

In May, there were 216,000 family pension beneficiaries, and most of them were surviving spouses whose average monthly pension allowance was HRK 2,096, which was below the average pension. For instance, in May, pension associations reported that the average pension paid out  for February stood at HRK 2,567.

The budget allocation for this purpose has been ensured for 2022 and 2023.

According to the government's estimates, this year, an estimated 1,100 recipients of family pensions can exercise this right to work part-time and continue receiving family pensions. In 2022, the numbers can rise to 3,200 and in 2023 to 4,100 beneficiaries.

(€1 = HRK 7.484635)

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ZAGREB, Dec 14, 2020 - The Croatian Pension Insurance Fund (HZMO)  will start accepting applications by elderly persons for the right to a national pension as of tomorrow, and about 20,000 beneficiaries who will receive HRK 800 per month are expected next year, Minister Josip Aladrovic said on Monday.

The law on a national allowance for the elderly, which enters into force on 1 January 2021, provides for an income for Croatian citizens over the age of 65 who have not secured an old age income and are not entitled to a pension.

The allowance will be paid by the HZMO  through commercial banks, and first payments will be made in February 2021 for January 2021.

The national allowance for the elderly will cover the most vulnerable part of the population, Labour, Pension System, Family and Social Policy Minister Josip Aladrovic told reporters ahead of a government session.

The estimated cost in the state budget is HRK 132 million, and we have ensured that much for 2021, he said.

It will be possible to submit an application for the national allowance in person at a regional HZMO office, by mail or online through the e-Citizen system.

Aladrovic said that the target group were elderly citizens who did not have enough years of insurance and who were not covered by the social welfare system for some reason.

Those are citizens who have more than 20 years of uninterrupted residence in the Republic of Croatia, fewer than 15 years of pensionable service and who are over 65 years of age, he said.

ZAGREB, November 6, 2020 - An unfavourable worker to pensioner ratio, longer average life expectancy and low pensions are the main challenges for the Croatian pension system, it was said at an international online conference on the state and prospects of pension reforms.

The conference was organised by the Institute of Public Finance (IJF) and the Friedrich Ebert Foundation, with most opening speeches pointing to the fact that the pension reform carried out close to 20 years ago was a successful example.

At the time, along with the first pension pillar, a second and a third pension insurance pillar were introduced, which individualise pension saving and encourage voluntary saving to a greater extent.

Finance Minister Zdravko Maric said that pensions accounted for the largest portion of budget expenditures, with a share of around 10% in GDP.

Despite the challenges, Croatia has managed to maintain both the second and the third pillar, of which we are proud, and they will be strengthened in the future, said Maric.

The longer life expectancy, owing to development of technology, medicine and science, is good but has certain consequences for the pension system, he noted.

Speaking of the specificities of the Croatian pension system, he pointed to a rather unfavourable worker to pensioner ratio as well as an above-average share of people who have retired early, which, he said, are some of the reasons for further reforms of the pension system.

As many as 34% of elderly at risk of poverty, social exclusion

A senior economic advisor at the European Commission's Representation in Croatia, Judita Cuculic Zupa, recalled that payments into the second pension pillar had amounted to 5% since its establishment, suggesting that the government, as soon as fiscal circumstances allow it, should increase contributions to the second pillar, which are set aside from each insuree's gross wage.

She also noted that Croatia had too few people making payments into the pension system, which is due to a very low employment rate, the third lowest in the EU.

Cuculic Zupa said this was the biggest macroeconomic problem in the country whose resolution required the implementation of many reforms.

She warned that the share of elderly people at risk of poverty and social exclusion in Croatia was 34%, 15 percentage points higher than the EU average and largely due to low pensions.

She noted that one more specificity of the Croatian pension system was a significant share of privileged pensions and pensions granted under special regulations.

Pension funds' assets amount to more than HRK 120 bn

Croatian Financial Services Supervisory Agency (HANFA) director Ante Zigman said that with assets worth HRK 120 billion pension funds could continue providing assistance to the business sector, including in the context of potential privatisation and financial market development.

The head of the UMFO association of companies managing pension funds and pension insurance funds, Petar Vlaic, said that in the last two financial crises in Croatia pension funds had acted as real stabilisers on financial markets.

The importance of the four obligatory pension funds in Croatia is reflected, among other things, in the fact that individually they are the biggest holders of government bonds and they also hold stakes in many Croatian companies, said Vlaic.

He also said that assets held by Croatian pension funds would enable a future with adequate income for pensioners.

ZAGREB, September 21, 2020 - Prime Minister Andrej Plenkovic said on Monday that the payment of pension allowances was not in question, underscoring that increasing them by 10% by the end of the government's term in office is a priority.

"This is a clear message from the government about the protection of pensioners," Prime Minister said during the signing of an agreement on the establishment of a national council for pensioners and elderly persons with Visnja Fortuna, president of the National Pensioners' Convention of Croatia (MUH), and Jasna A. Petrovic, the Croatian Pensioners' Union (SUH).

The council is an advisory body that discusses the issues of pension and health insurance, social policy and the protection of the elderly and will submit its opinions to the government.

PM Plenkovic underscored successful cooperation with the MUH and the SUH, saying that the government endeavours to adopt everything that is useful in line with economic and financial ability.

As an example, he underscored the option to work and receive a pension allowance, which was now available to a greater number of pensioners.

"The results are visible -- according to latest data... there are currently 15,500 pensioners who are working in addition to receiving a pension allowance," he said.

Plenkovic also said that regular payment and indexation of pension allowances was ensured in the complex conditions of the coronavirus epidemic, with pension allowances being indexed by 0.7% since January 1, and by 1.41% since July 1.

He pointed out that the average duration of pensionable service of new pensioners had increased this year, which indicates there was greater awareness about the need to stay in the work force for longer. He added that the average old-age pension for 40 years of pensionable service amounted to HRK 4,669 (€619).

Pensions to increase by 10% by end of term in office

The Prime Minister said the government's first priority was to "increase pension allowances by 10% by the end of its term."

He recalled that in its previous term, the government increased pension allowances by about 12% and that lowest pension allowances were increased by an additional 3%.

MUH head Fortuna expressed satisfaction with the work of the council in the previous term and thanked the Prime Minister that the new agreement that would enable it to continue its work had been signed so quickly.

SUH head Petrovic warned that in addition to difficulties such as coronavirus, the government's term would be marked by poverty of the elderly as 61% of pension allowances were below the Croatian poverty threshold.

Petrovic also expressed hope that dialogue in the council would resolve the issue of family pensions which are mostly low and it was mostly women who were the beneficiaries of these allowances (94%).

Labour and Pension System Minister Josip Aladrovic said after the signing of the agreement that the work of the council has contributed to the quality of life of pensioners and elderly persons.

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ZAGREB, May 22, 2020 - An agreement on upgrading the Central Registry of Affiliates (REGOS) services on the labour market, worth HRK 54 million and to be co-financed from the European Social Fund (ESF), as part of the Operational Programme Efficient Human Resources 2014-2020, was signed on Friday.

The Central Registry of Affiliates will improve its efficiency and additionally enhance its promptness and quality of service related to pension insurance schemes. The project includes establishing pension information centres, developing a website and the mREGOS mobile phone application, as well as training staff at Regos.

Minister of Labour and Pension System Josip Aladrovic said that this, like other projects, encourages digital transformation with the help of EU funds to develop a modern public administration and provide citizens with services that are more accessible and more efficient.

More accessible, better and prompter services

Aladrovic recalled that the ministry had already signed similar agreements to improve services for end-users of services provided by the Pension Insurance Institute, Croatian Employment Service and Regos.

"The total value of the three agreements signed is HRK 314 million and it reflects the extent of the transformation these three institutions will undergo," he underscored and added that the incumbent government has had more than HRK 14 billion available through the ESF, HRK 9 billion of which has been contracted and more than HRK 5 billion has been paid out.