Pension System in Federation Bosnia and Herzegovina Nikolina Obradović, Advisor to Minister and Zehra Novo-Omanović, Assistant to Minister Sarajevo, godine

Pension System in Federation of Bosnia and Herzegovina According to Anex IV of the Dayton Peace Agreement, social protection is within competence of entities. In the Federation of B&H, social protection is within shared competance between the entity and cantons. State Ministry of Civil Affairs has coordinating role with regard to social policy. State agreements on social protection are signed through this ministry. Bosnia and Hezegovina has two autonomous systems of pension and disablility insurance on entity level.

The Main Characteristics of Pension and Disablity Insurance in the Federation B&H Single pillar - Public PAYG system of defined benefits Contribution rate of 23,5% of gross salary is compulsory for all employed, self- employed,… Article 51 of the Law prevents delays and accumulation of debt towards pensioners

OVERVIEW OF RIGHTS Rights guaranted by Pension and Disablity Insurance Act Old Age Pension Family Pension Altered Work Ability Phisical Disabily Disability Pension

OLD AGE PENSION Conditions for old age pension: Conditions for old age pension: 65 years of age and minimum 20 years of contribution payments. 65 years of age and minimum 20 years of contribution payments. With 40 years of contribution payments regardless of age. With 40 years of contribution payments regardless of age. Exceptionally (until 2015): with 55 years of age and 30 years of contribution for women, 60 years of age and 35 years of contributions for man Exceptionally (until 2015): with 55 years of age and 30 years of contribution for women, 60 years of age and 35 years of contributions for man

DISABILITY PENSION Granted to a person categorised with I Grade Disability: Granted to a person categorised with I Grade Disability: when disabilty is caused by work injury or profesional illness regardles of years in insurance; when disabilty is caused by work injury or profesional illness regardles of years in insurance; If disability was caused by out of work injury or illness, the pension is granted under condition that beneficiary has covered by pension insurance at least one third of hers\his work span (calculated from age of 20 until the day of disability) If disability was caused by out of work injury or illness, the pension is granted under condition that beneficiary has covered by pension insurance at least one third of hers\his work span (calculated from age of 20 until the day of disability)

FAMILY (survivor’s) PENSION Widow, widower and children have right to family pension under one of the following conditions: 45 years of age for women or 60 years of age for man reached before death of spose 45 years of age for women or 60 years of age for man reached before death of spose If within a year after death of spose, he \ she becomes unfit for work If within a year after death of spose, he \ she becomes unfit for work If she or he is guardian to children that have right to family pension. If she or he is guardian to children that have right to family pension. Children have right on family pension until age of 15, or if attending full time school until age of 25 Children have right on family pension until age of 15, or if attending full time school until age of 25

MAIN PENSION INDICATORS

THE MAIN PROBLEMS: Low coverage due to grey economy, contribution evasion and miopia Low coverage due to grey economy, contribution evasion and miopia 51% of pensioners receive minimal pension of 156 Euros 51% of pensioners receive minimal pension of 156 Euros Special legislation for war veterans and some other chategories Special legislation for war veterans and some other chategories Low efective pensionable age Low efective pensionable age Low GDP, population aging, etc. Low GDP, population aging, etc.

Financial Market of the Federation B&H B&H still burdend by unfinished privatisation proces, unsatisfactory development of private sector, law investment, substantial trade deficit, law GDP. Problems related to single market (labour legislation, banking, securities) Sarajevo and Banja Luka Stock Exchage Government bonds?

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