Compulsory pension insurance in the Republic of Croatia includes insurance on the basis of generational solidarity (I pillar) and insurance on the basis of individual capitalized savings (II pillar).
Pension insurance based on generational solidarity is part of the pension insurance system in which insured persons, based on principles of reciprocity and solidarity, are entitled to rights in case of old age, reduction of work ability, partial or total loss of working ability and physical impairment, and members of their family are entitled to rights in the event of death of the insured, or beneficiary’s rights.
The Croatian Pension Insurance Institute (HZMO) is the competent institution for exercising the right exclusively from pension insurance on the basis of generational solidarity (I pillar).
Pension insurance based on individual capitalized savings (II pillar) ensures the same circle of persons who have the status of insured persons in the I pillar, but on the day of the beginning of the application of the II pillar (on 1 January 2002) or at the time of entry into insurance (employment or self-employment or on a different basis) were under 40 years of age, as well as persons which were older than 40, and younger than 50 in 2002, if they opted for such insurance. Persons who reached the age of 50 on 1 January 2002, were insured only in the I pillar.
The Central Register of Insured Persons (REGOS) is the competent institution for insurance on the basis of individual capitalized savings (II pillar).
Compulsory pension insurance is financed by contributions of insured persons, employers and the state budget at the rate of 20% from the salary or the insurance basis. For insurees insured in both pillars, a contribution of 15% is paid for the I pillar and 5% for the II pillar, and for insurees ensured only in the I pillar, all 20% of contributions is paid into that pillar.
The Ministry of Finance or the Tax Administration are responsible for collecting these contributions.
Insured persons – I pillar
Pension insurance based on generational solidarity provides compulsory insurance to all working persons on different grounds, such as employment, professional or other business activity or other activities, trades, craft enterprises, etc.
- Employed persons and persons with equal status (persons assigned to certain duties, etc.),
- Persons who are on compulsory vocational training after completing their education,
- Persons completing a professional training to work without establishing a working relationship,
- Self-employed persons (craftsmen, trade individuals, lawyers, notaries, etc.)
- Other groups of persons (caretakers of Croatian disabled war veterans, parents – caretakers, members of management boards, top athletes, etc.) and others.
An unemployed parent who performs parental duties during the first year of the child’s life also has compulsory insurance, at his or her personal request.
The status of insured person is determined on the basis of an application for insurance. The application may be submitted by:
- The employer of the insured person or the payer of contributions, or
- The insured person, when he or she is the payer of contributions for pension insurance.
A person for which the payer of contributions does not submit an application or cancellation of insurance, may request from the Croatian Pension Insurance Institute (hereinafter: the Institute) to issue a decision on the recognition or termination of the status of insured person.
The application is submitted to the regional service / local office / branch office of the Institute, which is competent according to the employer’s registered office or its branch office (for employees), i.e. according to the place of residence or business activity, and the deadline for the submission of application is at the earliest 8 days before commencement of work and at the latest just before commencement of work with the employer.
As of 1 January 2014, all employers, or other mandatory applicants, with more than 3 insured persons are required to submit applications electronically. E-applications are web applications that allow users to register/cancel the pension insurance, applications for change of status during insurance, applications for commencement/termination of business activities of the contribution payer, as well as changes in the data of the contribution payer.
Employers whose registered office is located in other Member States of the EU – insured persons application in the Croatian Pension Insurance Institute
Any employer whose head office is located in a Member State of the European Union (EU), without a registered subsidiary or company in the Republic of Croatia, is obliged to apply for the pension insurance for a worker employed in the territory of the Republic of Croatia if the social security legislation of the Republic of Croatia applies to such worker.
The procedure of registering of these employers is performed in such a way that the Ministry of Finance of the Republic of Croatia – Tax Administration assigns a Personal Identification Number (OIB) to an employer from EU Member State who, in accordance with Article 21 paragraph 1 of the Regulation 987/2009, has to fulfil all obligations prescribed by the relevant legislation for its employees (insurance application and contribution payments) as if it he or she had a registered office or place of business in the competent Member State.
The above-mentioned employers are equal with employers from the Republic of Croatia and are obliged to submit a request for OIB assignment in accordance with the provisions of the Personal Identification Number Act and implementing regulations issued under this Act.
When registering the first insured person, the employer / insured person submits an employment contract or a certificate of a signed employment contract, a certificate issued by the Ministry of Finance – Tax Administration on the OIB granted to the employer. In case the employment contract is not concluded in Croatian, a certified translation of the contract, or the certificate of signed employment contract, must be enclosed.
Completed, certified and signed application for the commencement of insurance for persons in the Republic of Croatia may also be submitted by the employer or by an authorized representative/employee.
When this application is submitted by an authorized person / employee instead of the employer, the signed documentation must be accompanied by a signed power of attorney, i.e. a written agreement between the employee and the employer.
The application for the commencement of insurance (Form M-1P) and application for the termination of insurance (Form M-2P) are used to register and unregister the worker from the pension insurance. The regional organisational unit of the Institute is responsible for receiving applications and cancellations from the register, depending on the place of residence of the insured person.