The reports on population ageing and adequacy of pensions in 2018, as well as new recommendations for Croatia within the framework of the European Semester process were presented on Tuesday.

“Generally, Croatian pensions are lower than pensions in other EU member states. However, the greatest threat lies in the future. There is a risk that in the future, due to the ageing population, Croatia will lose the ability to protect its elderly from poverty,” said Ettore Marchetti of the European Commission’s Directorate-General for Employment, Social Affairs and Inclusion.

He added it was necessary to empower young people and help them on the labour market, as well as help the elderly to remain healthy and active for longer so that everyone can contribute to society.

The labour market in Croatia has improved, but the rate of youth unemployment is still high, said Egbert Holthuis of the same directorate-general, adding the education system needed to be improved as well.

People have to remain on the labour market longer, for their own sake and for the sake of their children, in order to ensure appropriate pension. Croatia needs to make better use of the EU structural funds for infrastructure and education, and those changes need to be faster, Holthuis said.

“Only 20 percent pensioners have a working life of 40 years or more. We have a deficit of 17 billion kuna (€2.3 billion) and it is this government’s objective to tackle a comprehensive pension reform, something previous governments avoided,” said Labour and Pension System Minister Marko Pavic.

He said that task forces had been formed to discuss solutions in detail with social partners, and that the relevant bills would be sent to parliament by September 15, and adopted by January 1, 2019.

“The aim of the reform is the sustainability of pensions, and an increase in pensions, that is, pension adequacy. A comprehensive reform is mostly oriented to future pensioners, but we will look for ways to increase pension allowances for current pensioners and include them as actively as possible in the labour market, with the possibility of retaining their allowances,” Pavic said.

He added that this year, Croatia had 1.6 billion kuna (€217 million) at its disposal earmarked for employment, that the number of workers had increased by 60,000 compared to last year, and that the ratio of those employed to pensioners had increased and in April stood at 1.23, whereas last year it was 1.20 people employed to each pensioner.

The objective of the reform, he said, is to extend working life from 30.7 to 40 years.

“This is not about ‘straight from work to the graveyard’, just the opposite, anyone entering the labour market earlier will also be able to retire after 41 years of working life, before they turn 65 or 67,” he said.

(€1 = 7.37 kuna)

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