First Release

Year: LVIII.
Zagreb, 16 February 2021
NR-2021-5-1

ISSN 1334-0557

PENSION ENTITLEMENTS IN THE REPUBLIC OF CROATIA, 2018

 

Accrued-to-date pension entitlements in the Republic of Croatia at the end of 2018 were estimated in accordance with the Eurostat methodological guidelines. For social security pension schemes, three discount rates were applied: 4% for the basic scenario, and 3% and 5% for the sensitivity analysis. According to the basic scenario of 4%, pension entitlements (column H, row 10 in tables 1., 2. and 3.) were estimated at 1 041.55 billion kuna or 270.27% of GDP. Applying the discount rates of 3% and 5%, pension entitlements were estimated at 1 249.22 billion kuna or 324.16% of GDP, and 883.80 billion kuna or 229.33% of GDP, respectively. The sensitivity analysis indicates that if the discount rate is changed by one percentage point, estimated social security pension schemes will change by more than 150 billion kuna. Additionally, pension entitlements according to defined contribution schemes (column A, row 10 in tables 1., 2. and 3.) were estimated at 98.25 billion kuna. Finally, total pension entitlements amounted to 1 139.81 billion kuna at a discount rate of 4%, 1 347.47 billion kuna at a discount rate of 3% and 982.05 billion kuna at a discount rate of 5%.

1 ACCRUED-TO-DATE PENSION ENTITLEMENTS AT A DISCOUNT RATE OF 4%

mln kuna

Row number ESA code Flow description Total (I) Defined contribution schemes (A) Social security pension scheme (H)
1 F63 Pension entitlements (incl. contingent pension entitlements) 1.045.555 92.013 953.542
2 D61 Increase in pension entitlements due to social contributions (2.1 + 2.2 + 2.3 + 2.4 - 2.5) 67.803 6.868 60.935
2.1 D6111 Employer actual social contributions 683 95 588
2.2 D6121 Employer imputed social contributions - - -
2.3 D6131 Household actual social contributions 28.315 6.109 22.206
2.4 D6141 Household social contribution supplements 39.151 1.009 38.142
2.5 D61SC Less: Pension scheme service charges 346 346  -
3 D619 Other (actuarial) change of pension entitlements in social security pension schemes 3.291 - 3.291
4 D62 Reduction in pension entitlements due to payment of pension benefits 39.338 92 39.246
5 D8 Changes in pension entitlements due to social contributions and pension benefits (2 + 3 - 4) 31.755 6.776 24.980
6 D81 Transfers of pension entitlements between schemes 0 -511 511
7 D82 Change in entitlements due to negotiated changes in scheme structure 62.520 - 62.520
8 K7 Changes in entitlements due to revaluations -26 -26 -
9 K5 Changes in entitlements due to other changes in volume - -
10 F63 Pension entitlements (incl. contingent pension entitlements (1 + Σ 5 to 9) 1.139.805 98.252 1.041.553

2 ACCRUED-TO-DATE PENSION ENTITLEMENTS AT A DISCOUNT RATE OF 3%

mln kuna

Row number ESA code Flow description Total (I) Defined contribution schemes (A) Social security pension scheme (H)
1 F63 Pension entitlements (incl. contingent pension entitlements) 1.228.069 92.013 1.136.056
2 D61 Increase in pension entitlements due to social contributions (2.1 + 2.2 + 2.3 + 2.4 - 2.5) 63.732 6.868 56.864
2.1 D6111 Employer actual social contributions 683 95 587
2.2 D6121 Employer imputed social contributions - - -
2.3 D6131 Household actual social contributions 28.305 6.109 22.196
2.4 D6141 Household social contribution supplements 35.091 1.009 34.082
2.5 D61SC Less: Pension scheme service charges 346 346 -
3 D619 Other (actuarial) change of pension entitlements in social security pension schemes 4.752 - 4.752
4 D62 Reduction in pension entitlements due to payment of pension benefits 39.338 92 39.246
5 D8 Changes in pension entitlements due to social contributions and pension benefits (2 + 3 - 4) 29.146 6.776 22.370
6 D81 Transfers of pension entitlements between schemes 0 -511 511
7 D82 Change in entitlements due to negotiated changes in scheme structure 90.284 - 90.284
8 K7 Changes in entitlements due to revaluations -26 -26 -
9 K5 Changes in entitlements due to other changes in volume - - -
10 F63 Pension entitlements (incl. contingent pension entitlements (1 + Σ 5 to 9) 1.347.473 98.252 1.249.221

3 ACCRUED-TO-DATE PENSION ENTITLEMENTS AT A DISCOUNT RATE OF 5%

mln kuna

Row number ESA code Flow description Total (I) Defined contribution schemes (A) Social security pension scheme (H)
1 F63 Pension entitlements (incl. contingent pension entitlements) 905.696 92.013 813.683
2 D61 Increase in pension entitlements due to social contributions (2.1 + 2.2 + 2.3 + 2.4 - 2.5) 70.346 6.868 63.478
2.1 D6111 Employer actual social contributions 683 95 588
2.2 D6121 Employer imputed social contributions - - -
2.3 D6131 Household actual social contributions 28.315 6.109 22.206
2.4 D6141 Household social contribution supplements 41.693 1.009 40.684
2.5 D61SC Less: Pension scheme service charges 346 346 -
3 D619 Other (actuarial) change of pension entitlements in social security pension schemes 2.269 - 2.269
4 D62 Reduction in pension entitlements due to payment of pension benefits 39.338 92 39.246
5 D8 Changes in pension entitlements due to social contributions and pension benefits (2 + 3 - 4) 33.276 6.776 26.500
6 D81 Transfers of pension entitlements between schemes 0 -511 511
7 D82 Change in entitlements due to negotiated changes in scheme structure 43.103 - 43.103
8 K7 Changes in entitlements due to revaluations -26 -26 -
9 K5 Changes in entitlements due to other changes in volume - - -
10 F63 Pension entitlements (incl. contingent pension entitlements (1 + Σ 5 to 9) 982.049 98.252 883.797

NOTES ON METHODOLOGY

Legal basis

Accrued-to-date pension entitlements are defined in the Regulation (EU) No 549/2013 and introduced by the European System of Accounts 2010. The pension entitlements are compiled in the Supplementary table on accrued-to-date pension entitlements in social insurance (Table 29), which is a structured table showing the initial (at the beginning of the year, row 1) and the final (at the end of the year, row 10) stock of pension entitlements along with their flows (rows 2 to 9). In addition to the rows, Table 29 also contains columns, of which only A (the second pillar) and H (the first pillar) refer to the Republic of Croatia, while the third pillar is excluded from the estimation procedure. All transactions in Table 29 are recorded in gross amounts, that is, they include taxes and service charges.

Calculation methods and data sources

The calculation is made in two parts: for defined contribution schemes (column A) and for social security pension schemes (column H). The main data sources for column A, that is, for defined contribution schemes are: REGOS (rows 2.1, 2.3, 4 and 6), HANFA (rows 1, 2.4, 2.5 and 10) and RMOD (row 4), while row 8 was obtained as a residual. Unlike column A, the calculation for column H is based on data sources from the Ministry of Finance (data for social security pension schemes) and on the actuarial modelling (rows 1, 2.4, 3, 7 and 10 in Table 29) for projections for the period of one hundred years, whereby the calculation procedure is divided by sex, pension type for pensioners and current contributors. The input parameters of the model are discount rate, wage growth, inflation, mortality rates (taken over from the Eurostat population projections – EUROPOP 2018) and retirement age in accordance with the national legislation.

Abbreviations  
Eurostat Statistical Office of the European Communities
ESA European System of Accounts
EU European Union
GDP gross domestic product
HANFA Croatian Financial Services Supervisory Agency
mln million
REGOS Central Registry of Insured Persons
RMOD Raiffeisen Pension Insurance Company
Symbols  
0 value not zero but less than 0.5 of the unit of measure used
- no occurrence
Σ summation

 

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Prepared by:
Nikola Motik and Igor Knež


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