Voluntary Pension Insurance based on Individual Capitalised Savings within Closed Funds
Dobrovoljno mirovinsko osiguranje na temelju individualne kapitalizirane štednje u zatvorenim fondovima
Coverage
Voluntary participation
- Current or former employees, association members or self-employed persons, respectively, participating in ‘closed pension funds’, which are special occupational retirement funds established by agreement (incl. collective agreements) and fund sponsors: employers, trade unions or other professional associations.
Financing
General finances
- Fully funded personal pension plans based on contribution payments (incl. state allowances) and capital revenues.
Contribution rates
- Contributions on behalf and for the scheme member paid by the fund’s sponsor (in practice paid predominately by employers).
- Additional contributions by a scheme member are also possible.
State support
- Employers’ contributions up to HRK 500 per month are exempted from income tax (maximum tax-exempted amount of HRK 6,000 per year).
- State subsidises savings by providing state allowance of up to 15% of paid contributions (restricted to one open or closed fund only, and to the maximum contribution amount of HRK 5,000 per year; maximum allowance amount: HRK 750 annually).
Administration
- The ‘Ministry of Labour and Pension System’ is the general competent authority that is in charge of legislative proposals and the general supervision of the functioning and implementation of all parts of the pension system.
- Pension companies manage the accumulation phase through operating closed pension funds; pension companies, pension insurance companies or life-insurance companies (depending on the person’s individual choice) manage the payout phase.
- The ‘Croatian Financial Services Supervisory Agency’ (HANFA) regulates licences, supervises business operations and investments, and sanctions pension companies and pension insurance companies.
Qualifying Conditions
- For partial one-time lump sum payment: minimum retirement age is 55.
- For temporary pension annuities: minimum retirement age is 55.
- For life-time annuities: minimum retirement age is 60.
Benefits
Pension payments
- Accumulated capital through contribution payments (incl. state allowances) and investment yields, minus administrative costs and costs/fees of pension provider.
- Defined contribution (DC) pension commitment.
- Temporary pension annuities or life-long annuity paid monthly (using unisex mortality tables).
- Partial one-off lump sum payment: amounts to max. 30% of the amount in the person’s personal account; the rest of the accumulated capital is paid in the form of temporary pension annuities or life-time annuities.
- Temporary pension annuities: minimum payment period is 5 years.
Taxation and social security contributions
- Pension payments are not subject to tax.
- Pension payments are not subject to social security contributions.
Coverage
Financing
Administration
Qualifying Conditions
Benefits
Voluntary participation
- Current or former employees, association members or self-employed persons, respectively, participating in ‘closed pension funds’, which are special occupational retirement funds established by agreement (incl. collective agreements) and fund sponsors: employers, trade unions or other professional associations.
General finances
- Fully funded personal pension plans based on contribution payments (incl. state allowances) and capital revenues.
Contribution rates
- Contributions on behalf and for the scheme member paid by the fund’s sponsor (in practice paid predominately by employers).
- Additional contributions by a scheme member are also possible.
State support
- Employers’ contributions up to HRK 500 per month are exempted from income tax (maximum tax-exempted amount of HRK 6,000 per year).
- State subsidises savings by providing state allowance of up to 15% of paid contributions (restricted to one open or closed fund only, and to the maximum contribution amount of HRK 5,000 per year; maximum allowance amount: HRK 750 annually).
- The ‘Ministry of Labour and Pension System’ is the general competent authority that is in charge of legislative proposals and the general supervision of the functioning and implementation of all parts of the pension system.
- Pension companies manage the accumulation phase through operating closed pension funds; pension companies, pension insurance companies or life-insurance companies (depending on the person’s individual choice) manage the payout phase.
- The ‘Croatian Financial Services Supervisory Agency’ (HANFA) regulates licences, supervises business operations and investments, and sanctions pension companies and pension insurance companies.
- For partial one-time lump sum payment: minimum retirement age is 55.
- For temporary pension annuities: minimum retirement age is 55.
- For life-time annuities: minimum retirement age is 60.
Pension payments
- Accumulated capital through contribution payments (incl. state allowances) and investment yields, minus administrative costs and costs/fees of pension provider.
- Defined contribution (DC) pension commitment.
- Temporary pension annuities or life-long annuity paid monthly (using unisex mortality tables).
- Partial one-off lump sum payment: amounts to max. 30% of the amount in the person’s personal account; the rest of the accumulated capital is paid in the form of temporary pension annuities or life-time annuities.
- Temporary pension annuities: minimum payment period is 5 years.
Taxation and social security contributions
- Pension payments are not subject to tax.
- Pension payments are not subject to social security contributions.
Legal Basis: Act on Voluntary Pension Funds (Zakon o dobrovoljnim mirovinskom fondovima, Narodne novine 19/14, 29/18, 115/18); Act on Pension Insurance Companies (Zakon o mirovinskim osiguravajućim društvima, Narodne novine 22/14, 29/18, 115/18).