Retirement Age to Be Increased to 67 Years?

By 14 March 2018

ZAGREB, March 14, 2018 - The Croatian government will launch a comprehensive pension reform in the second quarter of this year as part of which it will upgrade all three pension insurance pillars in cooperation with the social partners, academic community and interested public, the state secretary at the Ministry of Labour and Pension System Majda Burić said in Parliament on Wednesday.

"Working until the age of 67 is nothing new, it was prescribed by the 2014 law," Burić said in answer to the request by Gordan Maras of the Social Democratic Party (SDP) for government comment on speculation in the media that, as of 2033, the statutory retirement age would be 67 years.

Burić said that an in-depth analysis of the pension system had been carried out last year, including projections and impacts of possible solutions, in order to ensure social security for all pensioners and long-term sustainability of the pension system.

MPs supported amendments to the laws on voluntary pension funds and pension insurance companies to align national legislation with the EU's acquis communautaire, allow greater worker mobility between member states and facilitate the acquisition of a supplementary pension allowance.

The government wants the amendments to be put to a vote under fast-track procedure so that the Council of Europe's MONEYVAL Committee would not decide at its meeting in early April that Croatia has not made enough progress in addressing the European Commission's recommendations, Burić said.

Labour and Pension System Minister Marko Pavić said on Wednesday that the reform of the pension system was still at an early stage and that the integral reform would be implemented by the end of the year. "My team is close to completing analyses and in a month's time a task force will be formed and consultations will be held with social partners," Pavić said, noting that after consultations with employers the reform would be presented through the media and a set of relevant bills would be forwarded to parliament by the end of the second quarter.

He said the purpose of the reform was primarily to make the pension system sustainable, given that currently the worker-pensioner ratio was 1.2:1 and only 19% of pensioners had 40 years of service, and pension allowances were low. "We will investigate ways to increase adequacy and pensions within budget limits," Pavić told reporters.

According to media reports, the draft pension reform proposes increasing the statutory retirement age from 65 to 67 as of 2033.