LAWS TO WATCH: Compulsory Pension Funds Act

3 February 2014, LPJ Croatia Issue 70

The government sent to the Sabor amendments to the Compulsory Pension Funds Act.  The amendments stipulate that the funds earmarked for the beneficiaries of privileged pensions (e.g. armed forces, policemen, firemen, customs officers, etc.)  shall be transferred from the private 2nd stage pensions funds to the state managed 1st stage, essentially the state budget.

The above beneficiaries may, within 30 days after the Act comes into force, submit a request to the Central Registry of Insured Persons (REGOS) for retaining the status of a member of a private pension fund.  If the beneficiaries do not submit the request in time, the afore-mentioned funds will be automatically transferred to the state budget, and they will receive their pensions based on the principle of ‘inter-generational solidarity’. This decision is valid through 2015.

In 2014, the government plans to obtain approximately €368 million through these measures.  If one takes into account that the planned contributions this year will amount to approximately €52 million, the government could yield up to €420 million.

Note: The Sabor adopted the legislation.  The Act will come into force following the announcement in the Official Gazette…

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