Most retired people in Croatia receive the standard pension, which for July was 2,228 kuna (€300). 15,546 retired people receive a pension of less than 1,000 kuna. Adding those who receive pensions in between the two amounts we arrive at the number of 586,613 persons with an income lower than 2,228 kuna, or 55.31 percent of retired people. Peace in retirement clearly still needs to be fought for.

There is a whole series of problems with the Croatian pensions system. Since the beginning of 2019 the procedure for claiming an old-age pension has become more demanding, and at the same time early retirement pensions are permanently reduced. It is a sign of the problems with the Croatian pensions system, which has been trying to find “the right formula“ for the last thirty years.

Under the statutory pension scheme, all those born after 1963 are obliged to work until 65 years old except if they have already completed 41 years of work. All those born after 1966 need to work until 67 unless they have completed the 41 years.

Given today’s problems – difficulties with finding and retaining employment, increasingly precarious work, and unusual job contracts, especially for young people – it will be more and more difficult for workers to complete 41 years of qualifying work before the age of 67. This achievement now looks like a dream for most people.

Those who choose or need to claim an early old-age pension will be punished by the government. The amount of the early old-age pension is permanently reduced by 0.3 per cent for each month before retirement age, i.e. by 3.6 per cent per year, up to 18 per cent for five years prior to retirement. The reduction is permanent and does not depend on the length of the completed qualifying period.

The “67 is too much” initiative and civic action for change

Citizens are turning to protest because of the problems mentioned. Their discontent can be recognized in the support for the “67 is too much” campaign this year. This initiative demands that an insured person be entitled to an old-age pension upon reaching 65, as was the case prior to the pension reform, and also the cancellation of penalties for early old-age pensions. The initiative also demands an end to discrimination against older workers and the opportunity to work after 65 for all those who wish it.

The initiative has collected enough signatures, more than 740,000, for a referendum to be called on the age for retirement and on the reduction of penalties for early retirement. The referendum, if adopted, would bring the full retirement age back to 65, abolishing the plan to raise it to 67 years. It would also reduce penalties for an early old-age pension, which would fall from 0.3 per cent for each month before retirement age to 0.2 per cent. The largest reduction for early retirement, when taken five years before the official date, will no longer be 18 per cent but 12 per cent.

The initiative did not however include one important question – that of the privatization of the pension insurance system, or more precisely the so-called second-pillar pension . This scheme, proposed by the World Bank, was introduced during the 1990s as a model for transition countries. All the former socialist countries applied the model except Czechia and Slovenia, which implemented it on a voluntary basis. After the model proved damaging for pension sustainability and the public finances, Hungary, Poland and Slovakia decided to cancel it. Croatia has no such plans for now.

The Croatian Retirement Union has pointed out that allocating more resources to the second pillar causes a shrinking of the first pillar, the one based on intergenerational solidarity. Pension funds invest using the second pillar in order to grow their size, even if in reality things are different. 

A large part of the problem with the