Home / Business and Politics / Pension adjustment could amount to 7.11 percent

Pension adjustment could amount to 7.11 percent

Image by: foto

The president of the Croatian Pensioners’ Union Jasna A. Petrović estimates that the July pension adjustment could amount to 7.11 percent, a high adjustment amount shows that wages are rising, although still insufficient considering inflation, and the real value of pensions is significantly lower.

Petrović stated in an interview for Hina that the union, considering that all data is still awaited, has made preliminary estimates of pension adjustments and expects that the adjustment will be at the level of 7.11 percent.

This increase will bring about 40 euros more to pensioners who have an average net pension of 580.83 euros, but Petrović warned that 60 percent of pensioners receive pensions below the average. Moreover, this average is actually at the level of 534.84 euros when military and veteran pensions are excluded, so the increase will be less for those pensioners.

After all statistical data on wages and prices are known, the Management Board of the Croatian Pension Insurance Institute (HZMO) will make a decision on pension adjustments at a meeting after August 20. This means that pensions will increase from July 1, but the difference in that increase will be paid in September, with the pension from August.

Petrović reminds that at the meeting of the National Council for Pensioners in November, it was agreed that the government would be proposed to change the provision on pension adjustments in the next amendment to the Pension Insurance Act from the current 70:30 in favor of a more favorable index of inflation or wage growth to 85:15, compared to the request that was 100 percent.

– It seems that Finance Minister Marko Primorac did not foresee this; he does not show much social sensitivity towards pensioners, so we fear that this year there will be nothing for pensioners, except for adjustments according to the current model – emphasized Petrović, also reminding of the signatures collected in the petition ‘Higher pensions now’.

Pension adjustments before the crisis were significantly lower

Adjustments before the crisis in recent years were significantly lower. For example, the adjustment rate of the current value of pensions from January 1, 2019, was 1.15 percent, and from July 2.44 percent; in the following year 2020, adjustments were 0.70 and 1.41 percent, and in 2021, 0.56 percent and 2.46 percent.

The adjustment from January 2022 was at the level of 2.24 percent, and in July it jumped to 6.18 percent. Last year, in January it was 5.37 percent, and a record 8.42 percent was in July 2023. This year’s adjustment from January was 4.19 percent, and now the union’s estimates are at the level of 7.11 percent.

Petrović emphasizes that this shows that wages are rising significantly, although they are not sufficient for a normal life considering the rise in inflation, but also that the real value of pensions is significantly lower.

– That percentage increase in pensions means nothing because it always has to be compared with the growth of wages. If the share in wage growth continuously falls, then it means that pensions are falling in real terms – she warned.

Current statistics from HZMO show that the average net pension of all pension beneficiaries, excluding international agreements, is 580.83 euros, and its share in the average net wage for May 2024 is 43.9 percent.

According to new data from the Croatian Bureau of Statistics, the average monthly net wage paid per employee in legal entities for May was 1324 euros.

Tagged: