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Old-age provision in transition: the case of Croatia

Published online by Cambridge University Press:  15 January 2018

MARTIN WERDING  and
MARKO PRIMORAC
MARTIN WERDING
Affiliation:
Ruhr-Universität Bochum & CESifo Research Network, Room GC 04/312, 44780 Bochum, Germany (e-mail: martin.werding@ruhr-uni-bochum.de)
MARKO PRIMORAC
Affiliation:
Faculty of Economics & Business - University of Zagreb & CESifo Research Network, Zagreb, Croatia
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Abstract

Like in a number of other transition countries, the Croatian pension system comprises a traditional public pay-as-you-go scheme and a mandatory funded scheme (second pillar) that will provide increasing amounts of supplementary pensions to those entering retirement in the future. Due to the continuing economic crisis, the public scheme is currently under enormous financial strain, with a sizeable impact on central government finances. At the same time, the level of benefits deriving from the overall system is likely to become inadequately low in the long run. In this paper, we describe the existing system and project its future development under current rules. We also discuss options for further reforming the system and highlight their potential impact on pension finances, public budgets and retirement incomes, as this may provide lessons, which are of interest elsewhere.

Keywords

H55H6J11J26Old-age provisionpay-as-you-go pensionsfunded pensionsdemographic ageingpublic debtfiscal sustainability
Type
Article
Information
Journal of Pension Economics & Finance , Volume 17 , Issue 4 , October 2018 , pp. 576 - 593
Copyright
Copyright © Cambridge University Press 2018 

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