1. Republic of Serbia Republic of Serbia Pension System 2009

2. Structure 1st PILLAR Mandatory Pension and Disability Insurance Pension and Disability Insurance Law 3rd PILLAR Voluntary pension insurance Law on Voluntary Pension Funds and Schemes *Requirements for the introduction of the 2nd pillar are not considered to be met

3. Mandatory PDI – 1st Pillar  Public PAYGO system  Old age, disability and survivor’s benefit  Point system  Contribution rate – 22%

4. Who pays and what can he expect Benefits:  Old age pension  Disability pension  Survivor’s pension  Reimbursement of funeral expenses  Bodily injury benefit CONTRIBUTORS:  Employees  Self-employed  Farmers

5. Old–age pension, criteria Phased increase in criteria for old-age pension  2008 – age 58,5 (F), 63,5 (M); pensionable period - 19 years  2009 - age 59 (F), 64 (M); pensionable period - 18 years  2010 - age 59,5 (F), 64,5 (M); pensionable period - 17 years  2011 – age 60 (F), 65 (M); pensionable period - 15 years

6. Old–age pension, criteria in 2011.  65 years of age (М), 60 (F) and minimum 15 years of pensionable service  40 years of pensionable service(М), 35 (F) and minimum age of 53  Minimum 45 years of pensionable service regardless of age

7. EXTENDED DURATION OF PENSIONABLE SERVICE - benefit for certain occupations  For especially strenuous, dangerous and health hazardous jobs  For age restricted jobs  For strenuous jobs resulting in inability to perform effectively due to reduced health capacity

8. EXTENDED DURATION OF PENSIONABLE SERVICE - benefit for certain occupations  For contributors with minimum 70% bodily impairments, disabled veterans (I – VI group), the blind, persons down with dystrophy, paraplegia, cerebral palsy, polio and multiple sclerosis  Pension Law provides for extended pensionable service (every 12 months are considered as 14, 15, 16 or 18 months of pensionable service) depending on how strenuous the job is

9. Disability pension, criteria Contributor is entitled to disability pension in case of TOTAL LOSS OF WORKING ABILITY If disability is due to : 1)Occupational injury and disease - no requirements regarding previous pensionable period; 2)Injury or disease unrelated to work – disability occurred before qualifying for old age pension plus completed 5 years of pensionable service

10. Survivors, criteria Eligible family members of:  Deceased contributor who completed minimum 5 years* of pensionable service, or was eligible for disability pension;  Deceased beneficiary of old age or disability pension; * If death occurred due to occupational injury or disease, duration of pensionable service is not taken into account;

11. Survivors, criteria Children*:  Up to 15 years of age  If high school student, up to age of 20  If post-secondary student, up to age of 23  If university student, up to age of 26  Without working capacity and supported by the deceased contributor - entitled to permanent survivor’s pension * Also stepchildren, adopted and all other children dependent upon the deceased

12. Survivors, criteria Widow / widower are entitled if prior to death of spouse death of spouse:  s/he completed 50* years of age / he 55* years of age  s/he has lost work capacity within a year from death of spouse;  If s/he has custody of a child entitled to survivor’s pension * In 2011, until then phased increase from 48 (F), 53 (M).

13. Survivors, criteria Other family members who can be entitled to survivor’s pension:  Father, mother, stepfather and stepmother, or adopted parents dependant upon the deceased

14. Cash benefit for bodily impairment due to occupational injury or disease  Only if bodily impairment is caused by occupational injury or disease  If bodily impairment is minimum 30%  8 categories as per severity of bodily injury  Fixed amount per month, adjusted regularly

15. Pension level - Calculation  Personal point (PP) x General point value (GPV) = Pension  PP* = Personal coefficient (PC) x years of pensionable service  PC** = total income / average wage in Republic for calendar year  PC = Σ annual PC / time period (year=1, month = 0,0833, day = 0,00278) * Maximum Personal point - 4 ** Maximum annual Personal Coefficient - 5

16. Calculation - survivors  Survivor’s pension amounts between 70% and 100% of the pension of the deceased, depending on the number of survivors

17. Indexation  REGULAR indexation –  2 times a year: April 1 and October 1  Parameter: cost of living in the previous six months  In 2009 – NO INDEXATION  EXTRAORDINARY indexation – in 2008  General point is indexed as pensions

18. Minimum pension  Minimum pension level - set in 2006 as 25% average wage in 2005  Once set, it is indexed as other pensions  extraordinary indexation of the minimum pension level each January 1 until 2010 – if below 20% of the gross average wage in previous year

19. Mandatory PDI - Organization  Mandatory Pension and Disability Insurance is provided and administered by The Republic Pension and Disability Insurance Fund consolidated 2008 in terms of administration from three separate Funds which previously provided PDI for employees, self-employed and farmers  The Fund is a legal entity having status of organization for mandatory social insurance where rights to PDI are exercised and resources for PDI are provided  Financial consolidation by January 1, 2011

20. Pensions for immigrants  Social Insurance Conventions with 25 countries  Pensionable service abroad is taken into account when assessing entitlement levels and pensions are payable abroad only if Convention is in place

21. Finances & Statistics

22. Contributors / Pensioners Ratio End of 2008 ContributorsPensionersRatio Employees1,800,0001,306,394 1 : 1.4 Self- employed 404,52850,959 1 : 7.9 Farmers314,925222,986 1 : 1.4 TOTAL2,519,4531,580,339 1 : 1.6

23. Finances & Statistics Pensioners - structure 2008 АVGPensionersShare Old-age 859,00754.6% Disability 364,59323.2% Survivors 349,16822.2% TOTAL 1,572,768100%

24. Finances & Statistics

25. Voluntary Pension Funds and Plans – 3rd Pillar  Introduced in 2006  End of 2008 – 10 Funds, 155.871 insured (6.2% of the insured in 1 st Pillar)  BASIC PRINCIPLES : voluntary membership, fund accumulation, investment risk distribution, equality of membership and transparency  Tax free contribution – 3.528 RSD

26. Assets  Assets Value – end of 2008 – 4.6 billion RSD (0.17% of the GDP)

27. Current problems and challenges  Low Dependency ratio  High deficit  Insecure economic environment and unstable political situation  High share of ’’young pensioners’’

28. Reforms in progress  Reform of the administration – more efficiency, less costs  Improvement in contribution collection  Further parametric reform in 1st Pillar  Strenthening of the 3rd Pillar  Inclusion of the Military Fund into the unified Pension System

29. ТHANK YOU!