Basic characteristics

Back
Basic characteristics

Ensuring of social security in old age at the level of the state is primarily organized through a pension system, by which, in the specific way, the country guarantees to the persons that were paying a contribution for the pension insurance in the prescribed period a corresponding level of social security when they leave the world of employment. In the Republic of Croatia, there are several legal regulations in force, which arrange the pension system which was, from the beginning of 2002, combined, public-private, organized in three levels, two of which are mandatory, and the third voluntary. Thereby, only the first level of the system (Pillar I.) was organized according to the principle of specific dues, i.e. according to the principle of generation solidarity and the same is carried out by public institution, the Croatian Pension Insurance Institute. 

The second and the third level of the system (II. and Pillar III.) are organized according to the principle of defined contributions, thus, a capitalized system is in question, whereby Pillar II. is mandatory and leans on the system of generation solidarity in the sense of acquiring the conditions for realizing the right to the pension, but it is carried out by legal persons (pension companies that manage the mandatory pension funds in the phase of accumulation, i.e. pension insurance companies, in the phase of payment of pensions). Pillar III. is a voluntary pension insurance, which is also completely carried out by legal persons (pension companies that manage voluntary pension funds in the phase of accumulation and, in some cases, in the phase of payment of pensions, i.e. pension insurance companies, exclusively in the phase of payment of pensions).

Rates of the contribution for pension insurance are determined by the Contributions Act. For the insured persons of Pillar I. (pension insurance on the basis of generation solidarity), the contribution rate amounts to 20.00%, while, for the insured persons of Pillar II, those rates are divided to the rate for mandatory pension insurance on the basis of the individual capitalized savings 5.00% and the rate for mandatory pension insurance on the basis of generation solidarity of 15.00% from the salary and other bases for payment of the contributions.