Pensions in Croatia are lower than in other EU member states, however the greatest threat to the system is that Croatia will not be able to shield its aging population from poverty in the future, according to two reports on the country’s pension system.
These warnings were voiced by EU officials on Tuesday in Zagreb at a presentation of a report on pension adequacy for 2018, a report on the ageing of the population, and the latest recommendations for Croatia issued as part of the European Semester.
“In general terms, Croatian pensions are lower than in other EU member states. However, the greatest threat lies in the future. There is a risk that in the future, because of its ageing population, Croatia will not be able to protect its pensioners from poverty. That’s why it is important to empower young people and help them find jobs, while helping the elderly stay healthy and active longer, so that they can remain productive members of society,” said Ettore Marchetti from the European Commission’s Directorate General for Employment, Social Affairs and Inclusion.
Egbert Holthuis, also from the EC’s directorate, said Croatia’s labor market had improved, but there was still a high rate of unemployment for young people, adding that could be remedied with improvements to the education system.
“People will have to remain on the labor market longer because of themselves and their children, in order to ensure adequate pensions. We believe Croatia should take better advantage of the EU’s structural funds for infrastructure and education and this should change more quickly,” he added.
Labor and Pension System Minister Marko Pavić concluded that the data from the reports shows the need for pension system reform. “It is clear that we have only 20 percent of pensioners who put in 40 years of work or more. We have a deficit of 17 billion kuna and it is the goal of this government to tackle comprehensive pension reform – something earlier governments were loath to do,” Paivć said.
He said the ministry had formed working groups, which will go over the details of the plan with labor unions and employers. New legislation should be drafted by September and adopted in early 2019.