Terms in the pension system

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Terms in the pension system

  1. The pension company is a joint-stock company or a limited liability company with the seat in the Republic of Croatia which manages the mandatory or voluntary pension funds on the basis of the HANFA's approval. 
  2. Mandatory pension fund is a pension fund which is established by the pension company on the basis of the Agency's approval and which is managed by the pension company in its own name and for the common account of members of the pension fund in accordance with the provisions of the Act. The mandatory pension fund can be a pension fund of the A, B or C category. 
  3. Mandatory pension funds of the A, B or C category are categories of the mandatory pension funds managed by the same pension company. Pension funds of different categories have different strategies of investment. The undertaken risk should be the lowest in the C category fund, and the highest in the A category pension fund. 
  4. Voluntary pension fund is the fund which be established by the pension company, a mandatory pension funds management company or an UCITS funds management company on the basis of the HANFA's approval, and which is managed by one of the mentioned companies in its name, and for the common account of the fund members in accordance with the provisions of this Act. A voluntary pension fund can be an open and closed one. 
  5. Open voluntary pension fund is a voluntary pension fund which, under the conditions anticipated by the Voluntary Pension Funds Act, all the physical persons can join.
  6. Closed voluntary pension fund is a voluntary pension fund which, under the conditions anticipated by the Voluntary Pension Funds Act, can be joined by the physical persons which are employed by an employer or which are members of a union, members of the association of self-employment activities or which are self-employed persons.
  7. Sponsor is a legal or a physical person, including also unions and employers and associations of self-employment activities, which participates in establishing of a closed voluntary pension fund and payments to the closed voluntary pension fund in the name of the fund members in any way.
  8. A self-employed person is a person which performs a self-employment activity, for example, a craft and activities equalized with a craft, liberal professions, farmers and others, or a person that employs himself alone in the sense of corresponding regulations of another member country.
  9. Closed voluntary pension fund with the defined benefits means a closed fund that covers biometric risks or guarantees an investment result or a specific level the pensions, if establishing of such a type of the fund is allowed according to the regulations of a home member state.
  10. Biometric risks are risks connected with death, disability or a long life time.
  11. Master member state is a member state in which the seat of the pension company is registered or, if it does not have a  registered seat, a member state in which the pension company performs its basic activity.
  12. A home member state is a member state different from the master member state, the legislation of which, that determines the field of labour and social welfare in the part that refers to the pension plan, applies on the relationship between the sponsors and members of the closed fund. 
  13. A member state is a member state of the European Union or a state signatory of the agreement on the European Economic Area.
  14. The third state is state which is not a member state of the European Union or a state signatory of the agreement on the European Economic Area.
  15. UCITS fund (Undertakings for Collective Investment in Transferable Securities) is an investment fund determined by the law that that stipulates the establishing and operation of open investment funds with public offering. 
  16. Member of the mandatory pension fund is the insured person which is registered in the mandatory pension fund. 
  17. Member of a voluntary pension fund is person that joined the fund on the basis of the concluded contract on membership with the pension company and is entered in the register of the fund members, based on which he realizes or will realize the right to the pension, in accordance with the provisions of the pension plan and the law.
  18. Member of the pension company is shareholder or holder of a business share of the pension company. 
  19. Pension beneficiary is person that realized the right to the pension and receives the pension. 
  20. Pension insurance companies specialize for payment of pensions. For the moment, there is only one in Croatia - The Raiffeisen Pension Insurance Company.
  21. Pension is a periodic payment in cash which the pension insurance company or fund pays to the person that realized the right to it after fulfilling the conditions prescribed by the Act, whereby, in case of mandatory pensions, payment may be only lifelong, while, in case of voluntary pensions, it may be lifelong or temporary.
  22. Reference day is the day of fulfillment of the age conditions for acquiring the right to the old age pension according to the Pension Insurance Act. 
  23. Personal account in the mandatory pension fund is an account opened to the name of a member of the pension fund in the selected pension fund, on which paid contributions are recorded, and all the changes in the personal assets of a member of the pension fund during the period of the individual capitalized savings, which is kept by the Central Registry of Insured Persons. 
  24. Personal account in a voluntary pension fund is an account which is kept in the pension company, and opened to the name of a member of a voluntary pension fund in the selected fund, and, in that account, the paid cash assets and all the changes in the personal assets of a member of the fund during the period the individual capitalized savings are recorded. The personal account is kept by the pension company. 
  25. Pension plan represents the complete rules, regulations, agreements, contracts or statements by which mutual rights and obligations for acquiring the right to the pension within the voluntary pension insurance on the basis of the individual capitalized savings are regulated.
  26. Transfer of the account means transfer of the assets from the personal account of a member from one to the second pension fund. 
  27. Compensation for leaving the fund means an exit fee in the sense of transfer of a member from one to the second fund.
  28. Informative prospect means the statement of the pension company with the whole, accurate and objective information on the pension fund and the pension company that manages that fund, on the basis of which a potential member of the pension fund can make the decision about the membership in the pension fund. 
  29. Articles of Association is basic by-law of the pension fund which stipulates the basic legal relationships of the fund. 
  30. Security are the assets on a special account opened in the depository on which the pension company must keep a million kuna for every 10,000 members above fifty thousand members of all categories of pension funds managed by the same pension company. 
  31. The depository is a credit institution or a branch office of the credit institution which is entrusted with the duties prescribed by the provisions of the Act.
  32. HANFA is the Croatian Financial Services Supervisory Agency, the competences and scope of activity of which are stipulated by the Act on the Croatian Financial Services Supervisory Agency and the Mandatory Pension Funds Act and by the Voluntary Pension Funds Act. The main regulatory and supervisory authority of the Republic of Croatia for supervision of legality and ethicalness in operation of pension funds and pension insurance companies, and supervision and regulation other participants on the market of capital in Croatia.
  33. REGOS the Central Registry of Insured Persons is a Government institution for keeping the records about the state of personal pension accounts. Its basic task is to collect contributions for members of the mandatory pension funds and keep the records on personal accounts of members. Counters of REGOS are the only place where the mandatory pension fund can be selected, and they are situated in the FINA branch offices.
  34. HZMO - the Croatian Pension Insurance Institute is a Government institution that was established for the purpose of realizing the rights of the employees, farmers, craftsmen and other persons from the mandatory pension insurance, on the basis of generation solidarity.
  35. European Insurance and Occupational Pensions Authority (hereinafter: EIOPA) means the European supervisory authority established by the Decree (EU) no. 1094/2010 of the European Parliament and the Council of 24 November, 2010, about establishing of the European supervisory authority (The European Insurance and Occupational Pensions Authority), about the modification of the Decision no. 716/2009/EZ, and about putting the Commission Decision 2009/79/EZ (SL L 331, 15 December, 2010.) out of force.