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Pension system

Updated: February 2011

Download leaflet by the Croatian Institute for Pension Insurance: 
Overview of pension qualifying conditions in Croatia
 

Old-age pension:
An insured person is entitled to old-age pension upon reaching 65 years of age having completed 15 years of qualifying periods.
An exception to this rule is that during the transitional period from 1 November 2010 until 31 December 2029 women who have completed 15 years of qualifying periods are entitled to old-age pension subject to special provisions (please refer to the leaflet linked above).

Anticipatory pension:
Insured persons aged 60 with 35 years of qualifying periods may be awarded anticipatory pension.
An exception to this rule is that during the transitional period from 1 November 2010 until 31 December 2029 women who have completed 15 years of qualifying periods are entitled to old-age pension subject to special provisions (please refer to the leaflet linked above).

For information on Invalidity pension and Survivors' pension, please refer to the leaflet above or contact the Croatian Institute for Pension Insurance [contact map, in Croatian].

It is important to note that, when qualifying for old-age and anticipatory pension, the insured person should not be employed or have mandatory pension insurance - in Croatia or any country with which Croatia has a bilateral agreement on social security (list of countries, in Croatian).

The Three-pillar Pension System: Legal Regulations
The pension system in Croatia, and all its major subjects, is bound to strict laws comparable and compatible with modern and proven systems from around the world and Europe. In 1999 the pension system was reformed into the mixed- public/private system which is based on the three pillars scheme.

Pillar 1 – Pay as you go (PAYGO) system financed by contributions and state budget revenues.
The first pillar mandatory pension fund is the responsibility of the Croatian Institute for Pension Insurance. All employees are obliged to pay 15% of their total monthly income into the fund. The first-pillar pension is based on intergenerational solidarity and the amount given for the payment of pension benefits to current pensioners.

Risks covered by the 1st pillar are: old age, death, invalidity, and physical damage.
Protection of beneficiaries is provided in the form of minimum pension (guaranteed right), and restriction in the form of maximum pension. The acquisition of all first pillar pensions depends, in addition to age conditions, on the length of qualifying (mostly insurance) periods completed. The exception with benefits is based on work injury / professional disease.

Pillar 2 – Compulsory pension insurance based on individual capitalized savings

The second pillar is mandatory for persons who were under the age of 40 in 2002 and is additional to the first pillar. Persons who were aged between 40 and 50 in 2002 were able to opt out. Those who did, as well as people older than 50 in 2002 remained insured only under the first pillar, but their contribution equals 20% of gross salary, thus insuring equality. For those insured under both pillars, the extra 5% of total contribution (additional to 15% paid under the first pillar) is directed to the second pillar funds (a private pension fund).

Pillar 3 – Voluntary pension insurance based on individual capitalized savings

Open to all citizens since March 2002. The contributions are paid into a private capital fund. Every person residing in Croatia can be insured in the 3rd pillar. Organisation and management is the same as for the second pillar.

Pensioners have a preferential treatment in income taxation; their personal allowance is almost twice as high as of other tax payers. Therefore, pension benefits are hardly ever taxed. According to the distribution of pension benefits, around 85 per cent of pension benefits are below the personal allowance.

 

The contents of this page have been authorized by the Croatian Institute for Pension Insurance.


Disclaimer: The descriptions of administrative procedures in the Republic of Croatia given on this website are to be used for informational purposes only. Recommendations on this website do not substitute official information sources and information given by the official administration should be taken into account in all cases. The information provided on this website gives no right for claims of legal expectations of any kind. EURAXESS Croatia takes no responsibility for the content of external pages.