REPUBLIC OF SRPSKA GOVERNMENT

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REPUBLIC OF SRPSKAGOVERNMENT
Republic of Srpska Pension System Snjeana
Rudic Ministry of Finance Regional Seminar on
Pensions Zagreb, 09-10. March 2009
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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

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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

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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)

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Personal scope of pension arrangements
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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

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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)

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Situation of PAYG schemes
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Projections of Contributors and Pensioners
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Projections of Deficit as of GDP
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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

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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)

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REPUBLIC OF SRPSKAGOVERNMENT

• Pension Reform Working Group
• www.vladars.net
• Phone [phone]
• Fax [phone]
• s.rudic_at_mf.vladars.net