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.
- Workers, officials and employees together with the persons employed in the Republic of Croatia who are specified as their equals in accordance with special regulations,
- Persons selected or appointed to posts in public authorities, local authorities and regional authorities, if they receiving salary for their work,
- Persons who undergo on-the-job training for work in accordance with special regulations,
- Persons employed with international organisations with their seat in the Republic of Croatia who do not enjoy diplomatic immunity (foreign representative offices, international organisations and institutions), with international natural persons with the residence or seat in the Republic of Croatia or in diplomatic missions and consulates of foreign countries and international organisations or representative offices with the seat in the Republic of Croatia who enjoy diplomatic immunity, or persons privately employed with foreign nationals, provided that the EU directives on coordination of the social security system or international social security agreements do not specify otherwise,
- Third-country nationals and stateless persons employed in the Republic of Croatia, provided that the EU legislation on coordination of the social security system or international social security agreements do not specify otherwise,
- Posted workers who perform tasks for the employer with the seat in the Republic of Croatia and persons working in diplomatic missions or consulates of the Republic of Croatia abroad,
- Seasonal workers in agriculture, in accordance with the Employment Promotion Act,
- The unemployed persons must be insured under the terms and during the period set forth in the employment regulations,
- Persons who provide assistance and care to the Croatian Homeland War veterans and who receive remuneration for that work in accordance with special regulations,
- Persons whose employer has registered seat abroad, and to whom legislation of the Republic of Croatia is applied in accordance with the EU legislation on coordination of the social security system,
- Craftsmen and sole traders, entered in the appropriate register,
- Persons who carry out their professional activities independently in accordance with special regulations, such as lawyers, private health workers, artists, journalists, teachers, proof-readers, interpreters, midwives, representatives of nursing homes, natural persons whose professional activities include counselling and home assistance and care service and others,
- Top athletes, if they do not have the compulsory insurance coverage on some other grounds,
- Persons who are subject to income tax or profit tax on the basis of their self-employment in agriculture and forestry,
- Persons who carry out activities that may be performed without the issued approval or registration, but can be considered as self-employment and durable, and are carried out with the intention of generating income or profit, and if they do not have the compulsory insurance coverage on some other grounds,
- Persons who conduct household industry or a sideline in accordance with the Crafts Act, when they are not insured on some other basis and are not pension beneficiaries, except disability pension beneficiaries due to a partial loss of work capacity,
- Persons who conduct agricultural and forestry-related activities as their only or main job, and are entered in the relevant registry as holders or members of family farms or in the relevant registry of forest owner as holders of members of family farms, i.e. forest owners and members of their family households,
- Persons who are entered in the Farmers’ Registry
- Members of boards of management and executive officers of companies, liquidators and managers of cooperatives if they do not have the compulsory insurance coverage on some other grounds,
- Priests and other religious officials of a religious community that is registered in the records of religious communities kept by the ministry competent for the administration tasks, provided they do not have the compulsory insurance coverage on some other grounds,
- At their personal request, the compulsory insurance coverage is provided for a parent who has parental responsibilities for a child during the first year of the child’s life, provided that the child is a Croatian national and provided that both the child and the parent have residence in the Republic of Croatia,
- A parent as a family caregiver of a child with disability or of a disabled person in accordance with the social welfare regulations while such status is active,
- A foster-parent who provides standard foster-care and a foster-parent who is specialised in foster care for children,
- At their personal request, the compulsory insurance coverage is provided to the Croatian nationals employed abroad with international organisations and foreign employers, when they do not have the compulsory insurance coverage in accordance with the international regulations to which the international social security agreement refers and if they do not have the compulsory insurance coverage in accordance with the regulations of the European Union on coordination of the social security system,
- At their personal request, the compulsory insurance coverage is provided to persons employed in the EU institutions, when they do not have the compulsory insurance coverage in accordance with the EU regulations,
- Persons employed in the Republic of Croatia with the employers having their seat abroad, who do not have a registered branch-office in the Republic of Croatia,
- Crew members of a ship engaged in international voyages, whose employer, ship-owner or company is either a national or foreign legal person, provided that the EU directives on coordination of the social security system or international social security agreements do not specify otherwise,
- Persons who generate other income in accordance with income tax regulations and to which income a pension insurance contribution is paid in accordance with regulations on the compulsory insurance contributions (other income).
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.