engleski

Pension reform in Croatia

The purpose of this paper is to review the range of pension reform that has been adopted by the Government of Croatia. After the Introduction, in Section 2, we provide descriptions of detrimental situation and reasons for retirement insurance problems. These are demographic and systematic reasons that are very similar to a number of other transition economies. Due to that the current ratio between active insured persons and pensioners is highly unfavourable what causes high public expenditures. The means gathered through pension benefits are considerably reduced and insufficient for the existing needs, so the state is forced to transfer larger and larger resources from the budget to the Retirement Fund. Therefore, the Retirement Fund became one of the most important generators of the Budget deficit what puts the brakes on economic growth and development. Section 3 contains the general framework of pension reform where is explained the proposed structure of pension system on three pillars. After that in Section 4 we concentrate on slow progress in reform of financial market and financial institutions that are preconditions for successful pension reform. Finally, Section 5 examines problems of transitional expense and deals with some unsolved question of pension reform.

pension system; social security; pension reform; Croatia

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