Pension Reform with Higher Retirement Age Set for Autumn

By 27 June 2018

ZAGREB, June 27, 2018 - Prime Minister Andrej Plenković said on Wednesday the government planned for the autumn the adoption of a package of pension reform bills alongside a set of healthcare reform bills.

A good balance has been achieved in public consultation on the healthcare bill so there will be enough physicians in primary healthcare, he said on Croatian Radio ahead of a cabinet meeting at which the bill was sent to parliament, a bill over which general practitioners are protesting outside the government. Plenković said the bill was part of a healthcare reform aimed at joining hospitals, economising, combining public procurement and control mechanisms, and cutting the prices of medicines. "They are all efforts to slash the expenses of the healthcare system," he said, recalling that after last year's budget revision, 1.350 billion kuna went into the system.

Asked about the pension reform, Plenković said 38 billion kuna was necessary annually to pay out pensions, with 21 billion kuna coming from contributions and 17 billion kuna from tax revenues.

That's a huge amount for our state and for generational solidarity, so we will try to cover this gap with the reform, not overnight but in the long term, he added.

The reform aims to ensure a sustainable system and adequate pensions so that people get more than they do now. Many pensioners live on very small pensions and have a hard time making ends meet, Plenković said.

The working life will likely be longer, which is a trend in other countries too. There is a lot of early retirement and special regimes, so we have to find a balance, he added. "A public consultation will begin soon and a set of pension reform bills is envisaged for September 6. We wish to reach a consensus with the social partners. It is a structural reform the government plans to carry out this year," Plenković said.

He also commented on announcements that VAT would be cut 1% and the possibility of a political agreement on reducing the cost of labour, saying the basic goal was higher net salaries and that all ruling coalition partners were interested in that.