Growth in Pension Contributions in Serbia Amidst State Support
The Serbian Pension and Disability Insurance Fund reports increased revenue as state subsidies account for over 20% of pension payments.
As of mid-March 2024, the Republic Fund for Pension and Disability Insurance (PIO) in Serbia reported revenue of 192.3 billion dinars (approximately 1.64 billion euros) in contributions for pension and disability insurance.
This figure exceeds the initial projections by 4.1 billion dinars and reflects an increase of 21 billion dinars compared to the same period in the previous year, according to PIO Fund director Relja Ognjenović.
Ognjenović indicated that while there has been an uptick in original revenue sources, these funds covered approximately 72.8% of pensions paid in January and February.
State subsidies accounted for 21.9% of the pension funding gap, alongside mandatory transfers to the government, which constituted 5.3% of the total.
Moreover, contributions for pension and disability insurance in 2024 showed a year-on-year increase of 15.5%, with growth outpacing wage increases by more than a percentage point.
This rise is attributed to an increase in employment figures.
However, Ognjenović noted that since the end of 2022, the PIO Fund has been unable to meet pension expenditure independently without state intervention.
Despite the improved original revenue, the fund has faced significant pension adjustments due to biannual increases in 2022, both regular and extraordinary.
Furthermore, from 2023, the contribution rate was lowered from 25% to 24%.
Ognjenović highlighted an upward trend in the number of pensioners commencing in mid-2024, necessitating continued reliance on budgetary support.
To alleviate further fiscal pressure on the PIO Fund, Ognjenović suggested that relocating health insurance payments, currently valued at 104.74 billion dinars, could reduce total expenditures, decreasing the projected state subsidy share from 22% to approximately 14.6%.
Notably, the number of individuals qualifying for early retirement benefits is on the rise annually, with expectations to reach 75,215 early pension recipients by December 31, 2024.
This figure exceeds the initial projections by 4.1 billion dinars and reflects an increase of 21 billion dinars compared to the same period in the previous year, according to PIO Fund director Relja Ognjenović.
Ognjenović indicated that while there has been an uptick in original revenue sources, these funds covered approximately 72.8% of pensions paid in January and February.
State subsidies accounted for 21.9% of the pension funding gap, alongside mandatory transfers to the government, which constituted 5.3% of the total.
Moreover, contributions for pension and disability insurance in 2024 showed a year-on-year increase of 15.5%, with growth outpacing wage increases by more than a percentage point.
This rise is attributed to an increase in employment figures.
However, Ognjenović noted that since the end of 2022, the PIO Fund has been unable to meet pension expenditure independently without state intervention.
Despite the improved original revenue, the fund has faced significant pension adjustments due to biannual increases in 2022, both regular and extraordinary.
Furthermore, from 2023, the contribution rate was lowered from 25% to 24%.
Ognjenović highlighted an upward trend in the number of pensioners commencing in mid-2024, necessitating continued reliance on budgetary support.
To alleviate further fiscal pressure on the PIO Fund, Ognjenović suggested that relocating health insurance payments, currently valued at 104.74 billion dinars, could reduce total expenditures, decreasing the projected state subsidy share from 22% to approximately 14.6%.
Notably, the number of individuals qualifying for early retirement benefits is on the rise annually, with expectations to reach 75,215 early pension recipients by December 31, 2024.
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