Statutory Pension and Disability Insurance Scheme
Обавезно пензијско и инвалидско осигурање
Coverage
Mandatory insurance
- Employees in the private and public sector (persons employed in a business organisation, other legal entity, state body, unit of local government or with a private individual; civilian persons serving in the Serbian Army; professional military personnel, elected or appointed persons, if entitled to wage for the performed functions; employed persons sent to work abroad; foreign citizens and persons without citizenship employed with foreign legal entities and private individuals in the territory of the Republic of Serbia unless specified differently in the international agreement, i.e. unless insured according to the regulations of another country; persons who, in accordance with the law, perform temporary and occasional jobs if they are not insured on another basis).
- Self-employed persons (persons that in compliance with the law shall perform independently a commercial or other activity, unless mandatorily insured based on employment; persons that perform jobs based on civil contract, as well as jobs based on other contracts, for the performance of which they are entitled to a compensation, and are not insured on any other basis; priests and clergymen unless they are insured on another basis).
- Farmers (persons dealing with agricultural activities as the only or main profession, such as farmers, members of farmers’ households and members of mixed households; such persons must not be insured as employees or self-employed persons, must not be pension beneficiaries or persons at school).
Voluntary insurance
- Non-compulsorily insured persons (for example: persons who earn income on the basis of property).
Financing
General finances
- This scheme is financed on a PAYG basis from insurance contributions.
- The state finances annual deficits (approximately 13% of GDP per year).
Contribution rates
- Contribution shared between employer (11%) and employee (14.5%) with income assessment ceiling.
- The self-employed and farmers contribute the total rate themselves (25.5%).
Taxation of contribution payments
- Contribution payments do not represent a separate category of taxable income.
Administration
- The Fund for Pension and Disability Insurance of the Republic of Serbia administers the scheme.
Qualifying Conditions
Qualifying conditions
- Standard old age pension: statutory retirement age is 65 for men and 63 for women; minimum insurance period: 15 years. Retirement age for women increases to 65 until 2032 when equalisation of conditions for men and women will be reached (women born after 01/01/1967).
- Special conditions apply for old age pensions for long service (45 years; no specified retirement age); persons with hazardous jobs (minimum retirement age is 55; minimum insurance period increases until 2022 to 25 years, of which at least 15 years must be effectively spent in especially arduous jobs, jobs where the length of insurance is calculated with increased duration in the pension calculation); persons in special occupations who work in particularly complex, specific, or operational jobs, such as police officers, members of special police units, members of the Security Information Agency, members of the Military Security Agency and the Military Intelligence Agency, (minimum retirement age 53 years; minimum service periods: 20 years effectively on the respective jobs).
Early retirement
- Early retirement age increases to 60 years until 2024 for men and women (born after 01/01/1964) with minimum insurance period of 40 years with negative (permanent) adjustments to pension benefits (0.34% per month). In 2020, the minimum early retirement age for men is 58 years of age and 4 months after an insurance period of 40 years; for women, minimum early retirement age in 2020 is 57 years and eight months after an insurance period of 39 years.
Deferred retirement
- Retirement can be deferred without limit.
- Individuals who stay in work continue to increase their pension based on the principle of actuarial neutrality.
Combining employment & retirement
- Termination of employment is a precondition for claiming pension benefits.
- After retirement new employment is permitted without restrictions: there is a possibility for the beneficiary of the old age pension to engage in employment activity or to be engaged on the basis of one of the contracts which do not establish employment.
Benefits
Pension benefits
- Primarily based on the amount of contributory earnings throughout working career.
- Minimum amount: pension-tested benefit for persons with a pension below the minimum statutory pension level (the amount of the minimum pension cannot be less than the amount of 27% of the average monthly salary in the country).
- Maximum amount: the maximum amount of pension is levelled so that the personal coefficient cannot exceed 3.8.
Benefit calculation
- Based on the multiplication of the following factors: personal points are multiplied by the value of the general point on the day of exercising the right.
- Personal points: determined by multiplying the personal coefficient of the insured and his/her pension length of service.
- Personal coefficient: determined by dividing the sum of annual personal coefficients by the period for which they were calculated, and the pension length of service can amount to a maximum of 45 years.
- General point: nominal amount which represents the quotient of the calculated sum of pensions and the sum of personal points of all beneficiaries of old age and disability pensions who exercised the right to a pension in the period from 01/01/2001 to 30/06/2002.
- Bonus qualification periods: a special bonus insurance period of two years for women who gave birth to three children or more.
- To determine the amount of the old age pension of the insured woman, the completed length of service is increased by 6%.
- Adjustments: yearly adjustment of pension value by a percentage representing the sum of half the percentage change in consumer prices and half the percentage change in the average salary without taxes and contributions.
Taxation and social security contributions
- Pension benefits are not subject to income tax.
- Pension payments are not subject to social security contributions.
Coverage
Financing
Administration
Qualifying Conditions
Benefits
Mandatory insurance
- Employees in the private and public sector (persons employed in a business organisation, other legal entity, state body, unit of local government or with a private individual; civilian persons serving in the Serbian Army; professional military personnel, elected or appointed persons, if entitled to wage for the performed functions; employed persons sent to work abroad; foreign citizens and persons without citizenship employed with foreign legal entities and private individuals in the territory of the Republic of Serbia unless specified differently in the international agreement, i.e. unless insured according to the regulations of another country; persons who, in accordance with the law, perform temporary and occasional jobs if they are not insured on another basis).
- Self-employed persons (persons that in compliance with the law shall perform independently a commercial or other activity, unless mandatorily insured based on employment; persons that perform jobs based on civil contract, as well as jobs based on other contracts, for the performance of which they are entitled to a compensation, and are not insured on any other basis; priests and clergymen unless they are insured on another basis).
- Farmers (persons dealing with agricultural activities as the only or main profession, such as farmers, members of farmers’ households and members of mixed households; such persons must not be insured as employees or self-employed persons, must not be pension beneficiaries or persons at school).
Voluntary insurance
- Non-compulsorily insured persons (for example: persons who earn income on the basis of property).
General finances
- This scheme is financed on a PAYG basis from insurance contributions.
- The state finances annual deficits (approximately 13% of GDP per year).
Contribution rates
- Contribution shared between employer (11%) and employee (14.5%) with income assessment ceiling.
- The self-employed and farmers contribute the total rate themselves (25.5%).
Taxation of contribution payments
- Contribution payments do not represent a separate category of taxable income.
- The Fund for Pension and Disability Insurance of the Republic of Serbia administers the scheme.
Qualifying conditions
- Standard old age pension: statutory retirement age is 65 for men and 63 for women; minimum insurance period: 15 years. Retirement age for women increases to 65 until 2032 when equalisation of conditions for men and women will be reached (women born after 01/01/1967).
- Special conditions apply for old age pensions for long service (45 years; no specified retirement age); persons with hazardous jobs (minimum retirement age is 55; minimum insurance period increases until 2022 to 25 years, of which at least 15 years must be effectively spent in especially arduous jobs, jobs where the length of insurance is calculated with increased duration in the pension calculation); persons in special occupations who work in particularly complex, specific, or operational jobs, such as police officers, members of special police units, members of the Security Information Agency, members of the Military Security Agency and the Military Intelligence Agency, (minimum retirement age 53 years; minimum service periods: 20 years effectively on the respective jobs).
Early retirement
- Early retirement age increases to 60 years until 2024 for men and women (born after 01/01/1964) with minimum insurance period of 40 years with negative (permanent) adjustments to pension benefits (0.34% per month). In 2020, the minimum early retirement age for men is 58 years of age and 4 months after an insurance period of 40 years; for women, minimum early retirement age in 2020 is 57 years and eight months after an insurance period of 39 years.
Deferred retirement
- Retirement can be deferred without limit.
- Individuals who stay in work continue to increase their pension based on the principle of actuarial neutrality.
Combining employment & retirement
- Termination of employment is a precondition for claiming pension benefits.
- After retirement new employment is permitted without restrictions: there is a possibility for the beneficiary of the old age pension to engage in employment activity or to be engaged on the basis of one of the contracts which do not establish employment.
Pension benefits
- Primarily based on the amount of contributory earnings throughout working career.
- Minimum amount: pension-tested benefit for persons with a pension below the minimum statutory pension level (the amount of the minimum pension cannot be less than the amount of 27% of the average monthly salary in the country).
- Maximum amount: the maximum amount of pension is levelled so that the personal coefficient cannot exceed 3.8.
Benefit calculation
- Based on the multiplication of the following factors: personal points are multiplied by the value of the general point on the day of exercising the right.
- Personal points: determined by multiplying the personal coefficient of the insured and his/her pension length of service.
- Personal coefficient: determined by dividing the sum of annual personal coefficients by the period for which they were calculated, and the pension length of service can amount to a maximum of 45 years.
- General point: nominal amount which represents the quotient of the calculated sum of pensions and the sum of personal points of all beneficiaries of old age and disability pensions who exercised the right to a pension in the period from 01/01/2001 to 30/06/2002.
- Bonus qualification periods: a special bonus insurance period of two years for women who gave birth to three children or more.
- To determine the amount of the old age pension of the insured woman, the completed length of service is increased by 6%.
- Adjustments: yearly adjustment of pension value by a percentage representing the sum of half the percentage change in consumer prices and half the percentage change in the average salary without taxes and contributions.
Taxation and social security contributions
- Pension benefits are not subject to income tax.
- Pension payments are not subject to social security contributions.
Legal Basis: Law on Pension and Disability Insurance (Закон о пензијском и инвалидском осигурању), ‘Official Gazette of the Republic of Serbia’, No. 34/2003, 64/2004 – decision of the CC, 84/2004 – other law, 85/2005, 101/2005 – other law, 63/2006 – decision of the CC, 5/2009, 107/2009, 101/2010, 93/2012, 62/2013, 108/2013, 75/2014, 142/2014, 73/2018, 46/2019 – decision of the CC, 86/2019 and 62/2021.