Plenković Praises Pension Reform Despite Referendum Setback

By 20 September 2019

ZAGREB, September 20, 2019 - Prime Minister Andrej Plenković said during a visit to the northern Adriatic city of Rijeka on Thursday that the government's acceptance of the proposals by the "67 is too much" referendum initiative was an important decision, noting that the pension reform had already had positive effects.

Asked by the press if the government had capitulated to the unions, Plenković said that the government had announced an important decision at its meeting today and that it would submit to the parliament amendments to the Pension Insurance Act as proposed by the "67 is too much" initiative.

"The pension reform is good and positive, it is an important structural reform. During our term in office, pensions have increased by 11 percent, and by nearly 15 percent for low-income citizens. As of January 1 this year, some of the people who have retired could return to the labour market, and data shows that as many as 13,500 people have returned to the labour market. This is a message that there are people who want to work even after they turn 65," the PM said.

He noted that the retirement age of 67, provided for under the present law, was introduced by the SDP government. "I don't remember anyone organising any demonstrations or referendums at the time."

"Our message was that we heard the message of 700,000 citizens, that in these amendments we will deal with what primarily the three union federations see as problematic, and that at the same time we will amend the Labour Act and several other acts that cover special professions to allow those who so wish to work after they turn 65," Plenković said.

"In that regard, I think we have achieved the right balance and closed this issue, and that this reform, which has been assessed by experts from the European Commission and credit rating agencies as very good, ... will resolve the concerns raised," he added.

Asked if Regional Development Minister Marko Pavić, who had claimed while serving as Labour and Pension System Minister that abandoning the pension reform would cost 40 billion kuna (5.4 billion euro), should resign, Plenković said that it should be borne in mind that at that time a projection of financial sustainability over the next 20 years was being made and that amendments to other laws would make it possible for some of the people to work after 65 years of age, which would considerably reduce the costs.

"We will try to keep this fiscal effect as low as possible," the PM said, adding that Pavić had already taken the helm of another government department.

More news on the pension system can be found in the Politics section.