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REPUBLIC OF SRPSKA GOVERNMENT

REPUBLIC OF SRPSKA GOVERNMENT. R epubli c of S rpska Pension System Snje žana Rudić Ministry of Finance Regional Seminar on Pensions Zagreb, 09-10. March 2009. General . BiH is consisted of 2 entities: Federation of BiH Republic of Srpska (RS) RS figures: GDP per capita: 3.227 EUR

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REPUBLIC OF SRPSKA GOVERNMENT

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  1. REPUBLIC OF SRPSKAGOVERNMENT Republic ofSrpska Pension System Snježana Rudić Ministry of Finance Regional Seminar on Pensions Zagreb, 09-10. March 2009

  2. General BiH is consisted of 2 entities: Federation of BiH Republic of Srpska (RS) RS figures: GDP per capita: 3.227 EUR real GDP growth: 7,2% rate of unemployment: 20,5% population: 1,302 million total fertility rate: 1,25 life expectancy at birth: men: 73,9 women: 78,6 economic dependency ratio: 27,5% 2

  3. Pension landscape Mono pillar, DB, PAYG financed Types of benefits: Age pension 53,14 % Survivors 29,95 % Disability 16,91 % Administration of pension arrangement – Public Fund, PDIF RS Centralized Tax and Contribution Collection – Undergoing project 3

  4. Pension landscape Contribution rate 24% net salary (17% gross salary) Substantial budget transfers and support (22,14% of total PF revenues, 1,95% GDP) III pillar regulation – DC, funded, voluntary, individual/collective, privatelly managed (introduced in February 2009) Demographic pension reserve fund (buffer fund) – assets from privatisation (aimed to finance mandatory PAYG fund) 4

  5. Personal scope of pension arrangements

  6. Situation of PAYG schemes Pension expenditures / GDP: 8,5% Insured / pensioners: 1,43 Average age at retirement: 53 years System delivers a low rate-of-return & low replacement rate High % of employed are not contributing to the pension system or are sub declaring 6

  7. Situation of PAYG schemes RS PAYG system is always fiscally balanced Special mechanism for adjusting pension levels in order to prevent deficits from emerging (pension expenditures = pension system revenues) Substantial budget transfers and support (22,14% of total PF revenues, 1,95% GDP) 7

  8. Situation of PAYG schemes 8

  9. 9

  10. Projections of Contributors and Pensioners 10

  11. Projections of Deficit as % of GDP 11

  12. The building up of pension entitlements Low income (out of works) categories – Social protection system (general budget) Self employed and farmers – voluntary PAYG People with an incapacity to work – included in Social protection system (General and Municipality budgets) Unemployed people – Unemployment Fund (0,7% gross salary) Immigrating people – Proportional pension right 12

  13. Conclusion Increasing deficit PAYG system Negative demographic trends Decreasing replacement rate Limited posibilities for further parametric reforms (introduced in 2000) Considering funded mandatory II pillar indroduction Macro model developed Evaluation of demographic and economic preconditions (reconsideration) 13

  14. REPUBLIC OF SRPSKAGOVERNMENT Pension ReformWorking Group www.vladars.net Phone: +387 51 339 178 Fax: +387 51 339 655 s.rudic@mf.vladars.net

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