Voluntary Pension Insurance based on Individual Capitalised Savings within Open Funds
Dobrovoljno mirovinsko osiguranje na temelju individualne kapitalizirane štednje u otvorenim fondovima
Coverage
Voluntary participation
- All persons can participate voluntarily in the scheme without restriction.
- Simultaneous participation and saving in several voluntary pension funds are allowed; a person can also cumulate savings in open and closed funds simultaneously.
Financing
General finances
- Fully funded personal pension plans based on contribution payments (incl. state allowances) and capital revenues.
Contribution rates
- Persons provide contribution payments and decide upon its amount and the length of the contribution period individually; matching contribution payments can also be paid by employer.
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).
- The state subsidises savings by providing state allowance of up to 15% of the paid contributions (restricted to one fund only and to the maximum contribution of HRK 5,000 per year; maximum allowance amount: HRK 750 annually); a precondition for the state allowance is Croatian citizenship (exceptions apply1).
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 open pension funds; pension companies, pension insurance companies or life-insurance companies (depending on 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-time lump sum payments: 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
- All persons can participate voluntarily in the scheme without restriction.
- Simultaneous participation and saving in several voluntary pension funds are allowed; a person can also cumulate savings in open and closed funds simultaneously.
General finances
- Fully funded personal pension plans based on contribution payments (incl. state allowances) and capital revenues.
Contribution rates
- Persons provide contribution payments and decide upon its amount and the length of the contribution period individually; matching contribution payments can also be paid by employer.
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).
- The state subsidises savings by providing state allowance of up to 15% of the paid contributions (restricted to one fund only and to the maximum contribution of HRK 5,000 per year; maximum allowance amount: HRK 750 annually); a precondition for the state allowance is Croatian citizenship (exceptions apply1).
- 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 open pension funds; pension companies, pension insurance companies or life-insurance companies (depending on 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-time lump sum payments: 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.
1 Fund members without Croatian citizenship are entitled to the state allowance if the person resides in one of the EEA Member States. This right is limited to the period when contributions are paid for him/her into the mandatory pension insurance on the basis of individual capitalised savings in Croatia.
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).