OLD-AGE PENSION

The right to an old-age pension is acquired by an insured person who has reached 65 years of age, provided that he or she has completed 15 years of qualifying periods.

Insured persons – women in the period from 2014 to 2027 are entitled to an old-age pension at a lower age. In 2014, they could retire at the age of 61 (with the condition of 15 years of service), where the age requirement for each calendar year increased by 3 months until 2019. From January 1, 2019, to December 31, 2026, the age requirement is increased by four months each year, so in 2019 the insured woman earns this right at the age of 62 years and 4 months, in 2020 at the age of 62 and 8 months (transitional period).

 

YEAR OF GRANTING THE PENSION RIGHTS PRESCRIBED AGE

– WOMEN –

years months
2014 61 0
2015 61 3
2016 61 6
2017 61 9
2018 62 0
2019 62 4
2020 62 8
2021 63 0
2022 63 4
2023 63 8
2024 64 0
2025 64 4
2026 64 8
2027 65 0

 

These conditions are in force until December 31, 2027. In the period from January 1, 2028, the age requirement is increased by four months each year until December 31, 2032, and from January 1, 2033, the right to old-age pension is acquired by the insured person aged 67 and 15 years of pensionable service, regardless of the gender of the insured person.

 

Early retirement pension

The right to an early retirement pension is acquired by an insured person who has reached 60 years of age and completed 35 years of qualifying periods.

In the transitional period from 2014 to 2027 women are entitled to early retirement under more favourable conditions – at a lower age and lower pensionable service, so that from January 1, 2019, to December 31, 2026, the age and pensionable service are gradually increased by 4 months each year:

 

EARLY RETIREMENT PENSION for women
YEAR AGE QUALIFYING PERIODS
2014 56 years 31 years
2015 56 years and 3 months 31 years and 3 months
2016 56 years and 6 months 31 years and 6 months
2017 56 years and 9 months 31 years and 9 months
2018 57 years 32 years
2019 57 years and 4 months 32 years and 4 months
2020 57 years and 8 months 32 years and 8 months
2021 58 years 33 years
2022 58 years and 4 months 33 years and 4 months
2023 58 years and 8 months 33 years and 8 months
2024 59 years 34 years
2025 57 years and 4 months 34 years and 4 months
2026 59 years and 8 months 34 years and 8 months
2027 60 years 35 years

These conditions are in force until December 31, 2027. In the period from January 1, 2028, the age requirement is increased by four months each year until December 31, 2032, regardless of the gender of the insured person. After January 1, 2033, the right to early retirement is acquired by the insured person from the age of 62 and 35 years of pensionable service.

The amount of the pension is permanently reduced for each calendar month prior to the realization of the entitlement up to the age of insured person prescribed for the acquisition of the right to an old-age pension, linearly by 0,3% for each month of early retirement, i.e. 3.6% per year to a maximum of 18% for a maximum of 5 years prior to retirement.

An old-age pension for a long-term insured person (without deduction) is acquired by the insured person when they reach the age of 60 and 41 years of pensionable service in effective duration, and as of January 1, 2027, when they turn 61 years of age and 41 years of effective pensionable service.

 The right to early retirement pension due to employer’s bankruptcy shall be acquired by an insured person who, following the termination of insurance due to bankruptcy immediately preceding the fulfilment of conditions for obtaining the right to pension, was registered continuously for at least two years as an unemployed person with the competent employment service.

The right to an old-age pension and early retirement pension is acquired by an insured person from the day on which all conditions for pension were fulfilled, whereby the right to pension may be realised after the termination of insurance. Exceptionally, an insured person who continued to work up to half of the full time on the basis of a modified contract, may obtain the right to an old-age pension without terminating the employment.

Overview of conditions for obtaining the right to pension

 

Minimum pension

Insured persons whose pension is determined on the basis of salaries or insurance bases lower than the so-called minimum pension, are entitled to a minimum pension. Minimum pension is defined for each year of qualifying periods in the amount of 0.825% of the average gross salary until July 1, 2019, and from there on in the amount of 100% of the present value of the pension on the day of retirement.

Determination of pensions

The amount of pension is calculated by multiplying personal points, pension factor and the actual value of pension. The pension factor is determined by the type of pension to be realised, and the actual value of the pension is determined by the Governing Board of the Croatian Pension Insurance Institute (hereinafter: the Institute), based on the data of the Croatian Bureau of Statistics, no later than two months after the end of each half-year.

Personal points are calculated by multiplying the average value point with achieved qualifying periods and the initial factor. The initial factor affects the amount of pension in case of old-age pensions and early retirement pensions, so that:

  • An old-age pension is increased to insured persons who are granted pension for the first time after the age of 65, and have 35 years of qualifying periods, by 0.34% for each month after reaching the prescribed age for acquiring the right to an old-age pension, but no longer than 5 years,
  • An early retirement pension is reduced for the insured persons by 0,3% for each month of early retirement before reaching the prescribed age of the insured person for the acquisition of the right to an old-age pension.

The average value point is calculated on the basis of salaries earned over the entire working life in relation to the average salary in the Republic of Croatia.

The salary earned in the year in which the pension entitlement is exercised is not used for the determination of value points when calculating the pension, but for that year the average value points are taken in proportion to the insurance period in that year.

With each pension, and based on the special act, a pension supplement is calculated and paid in the amount of 27% of the pension.

 

Indexation of pensions

By determining the actual value of pension, pensions are adjusted twice a year in relation to economic trends in the Republic of Croatia.

The AVM adjustment rate, applied starting from 1 January 2015, is determined by the variable ratio of the consumer price index and gross salaries of all employees in the Republic of Croatia in the previous year, compared to the year preceding it (70:30, 50: 50 or 30:70, whichever is preferred). From July 1, 2019, it will be aligned as follows: from January 1 to July 1 each calendar year according to the 70:30 or 30:70 model.

 

Pension payment

Pensions and retirement benefits are fixed in monthly instalments and paid retroactively for each previous month.

During the period of employment or self-employment, the payment of pension is suspended and the status of an insured person is established, and after a minimum of one year of insurance, the pension beneficiary may, under certain conditions, request re-determination of the pension, followed by a formal decision.

The following beneficiaries are exceptions:

  • Beneficiaries of an old-age pension who work up to half of the full time,
  • beneficiaries of pensions according to special regulations with work up to half full time or full time,
  • Old-age pension beneficiaries for a long-term insured person with work up to half of full-time,
  • Early old-age pension beneficiaries with work up to half of full-time,
  • Beneficiaries of a disability pension due to occupational disability for work (according to previous regulations),
  • Beneficiaries of a disability pension due to partial loss or working capacity,
  • Beneficiaries who perform seasonal jobs in agriculture under the regulations on incentives for employment, and
  • Beneficiaries who receive other income.

 

The Institute may suspend the payment of pensions and other retirement benefits if a beneficiary does not submit any information or document requested by the Institute, which cannot be obtained by official means.

 

Your right to an old-age pension when you move within the European Union

If you were insured in two or more EU Member States, the procedure for obtaining the right to pension is initiated by submitting an application to competent institution in the Member State in which you have residence or in the Member State of last insurance. If you have never been insured in the Member State in which you reside, your application will be forwarded to the Member State of last insurance. An application submitted in one Member State shall be deemed as an application submitted in all Member States.

You will be entitled to pension in all Member States in which you have been insured for at least twelve months, and if you satisfy other conditions under the national regulations of those states, for example, mandatory age condition.

All periods of insurance you have completed in the EU Member States will be taken into account when you complete the required years of age for an old-age pension. The amount of pension from a particular Member State depends on the length of the period of insurance or residence in that state.

Your old-age pension will be paid regardless of where you reside (in which EU Member State).

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QUESTIONS AND ANSWERS

The procedure is initiated by submitting an application to the regional service / local office / branch office of the Croatian Pension Insurance Institute according to the permanent or temporary place of residence of the person submitting the application. If the applicant’s place of residence is located abroad, the regional service or office of the last insurance is competent.

In such a case, the right to a pension will be decided upon by the Institute on the territory of the last insurance, then the request is forwarded to the competent Institute in the other contracting state or EU member state on whose territory the insured person has completed insurance periods. The regional office or the office of the Institute in whose area was the applicant’s last insurance is competent to decide on the right to pension from the Croatian insurance.

An application for recognition of the right to an old-age and early old-age pension may be filed at the earliest one month before the fulfilment of the conditions for obtaining the pension rights prescribed by the Croatian legislation. However, it should be noted that this deadline is otherwise prescribed by the legislation of other Member States and that this period may be shorter or longer than the aforementioned.

In any case, when deciding on the right to retirement, the Croatian Pension Insurance Institute assesses the conditions for acquiring the right regardless of the date of filing the application in other countries.

According to the Pension Insurance Act, the right to a pension is realized after the termination of compulsory pension insurance. If an application is submitted within six months from the termination of insurance, the insured person is entitled to a pension from the first day of the following month after the termination of insurance. If, more than six months has passed after the termination of insurance, the insured person has the right to a pension from the first day of the following month after the submission of the application, and for six months retroactively.

In order to ensure quicker procedure for obtaining the right to pension, the so-called pre-completion process may also be initiated at the Institute. Future pensioners are allowed to inform the Institute about their intention to go to old-age or early retirement twelve months before applying for a retirement pension, in order to obtain their right in a quicker way.

As the beneficiary of an old-age pension you can occasionally work based on employment contract, and this will not result in loss of your pension rights or termination of pension payment during such employment.  Thus, you can simultaneously receive your pension and work on the basis of an employment contract.

Article 35 Of the Pension Insurance Act stipulates that the insured person may exercise the right to an old-age pension for a long-term insured person when they reach the age of 60 and 41 years of effective pensionable service.

According to the above, if your pensionable insurance is less than 41 years you do not meet the conditions for this type of pension.

Also, the right to an old-age pension for long-term insured persons cannot be realized by an insured person who has reached the age limit prescribed for obtaining the right to an old-age pension. In 2019, the insured person – a woman at the age of 62 and 4 months is entitled to an old-age pension. If you are younger than 62 years and 4 months, you may be entitled to an old-age pension for a long-term insured under the above conditions.

Yes, to meet the retirement age requirements for an old-age pension, the period spent on part-time employment is considered to be a period of full-time employment, but a pension is calculated in the amount for a really completed pensionable insurance (in your case for 10 years of pensionable insurance).

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