• 2014-10-23
• |  Belgrade

DPF Debate: Is It Good To Decrease Pensions?

At the debate “What Is Pension?”, within Democratic Political Forum, it is estimated that pension should be economic, not a social category.

Pensions should be economic, not social category and their reduction is not acceptable best solution, in addition it is not clearly defined – agreed the participants of the round table held within Democratic Political Forum on the topic “What Is Pension?”. 

Economist Milan R. Kovačević said at the event organized by Center for Democracy Foundation and Friedrich Ebert Foundation, that it is unclear how much and in which way the pensions are going to be decreased and that the field of pensions is regulated through several laws, thus being fairly complicated to legally “insert” pension decrease in different percentages and for various amounts. 

He stated that some legal acts are hard to understand and that would be hard to find legislative and constitutional basis to reduce pensions at all. 

Kovačević assessed that it should be reconsidered what is an actual property of Pension and Invalidity Insurance fund, and how to manage those assets. 

“There is no wish to perform a reconstruction and find out what should pension fund possess today as its own property. If this would be done, then leasing or selling this property will improve the present status which is utterly corrupt, since around 40% of payments for pensions are realized from the budget, which means that we went back to history and state pays 40% and in some form of circulation there is 60% from the incomes to pay out pensions”, he said. 

Deputy Director of the Republic Institute for Statistics Miladin Kovačević noticed that the number of pensioners and insurance paying population are almost equal, more precisely there are 1.7 million of pensioners and 1.8 of insured people (with farmers, technical personnel, those with occasional jobs and similar are excluded). 

As in regard to the formula for reduction of pensions, he said that it is a mathematical pattern that does not have an alternative, and that there were confusion related to the amount of decrease. 

“It is unclear why such a formula was not implemented with wages, therefore there is a small confusion about wages being less affected than pensions; however, this is not correct and this misconception is deriving from different formulas”, said Kovačević. 

According to his opinion, the reform of Pension Invalidity and Insurance system and all the implemented measures are not sufficient from the perspective of a long-term fiscal consolidation, but will reach the goal of total expenses for pensions being reduced from 14% to under 15% in GDP. 

“The problem also identified by IMF is that the pensions are going to decrease in perspective, average pension compared to average salary will decrease under 50% and this international financial institution should not allow it”, he said. 

Dragoljub Mićunović from Center for Democracy Foundation considers pensioners as victims and are “twice as much affected with the measures than those employed in public sector”.

“This is war with pensioners, because it was the easiest thing to do”, said Mićunović.

Snežana Šantić from the Municipality Stari Grad Association of Pensioners presented that pensioners form one fourth of the country’s population and that from total number (1.7 million) 400.000 of them live in Belgrade, while others are in the rest of Serbia. 

As she said, nowadays those who were building the state and regularly paid their duties are facing income reduction, and they are frequently forced to aid their children and grandchildren, since their income is sometimes the only certain one in the family. 

"Pensioners now do not understand why is it up to them to save the state", said Šantić. 

Representative of the Union Independence, Mihajlo Đorđević stated that union of pensioners will because of the foreseen reduction of pensions appeal to the Constitutional Court, and if they do not get the appropriate answer, they will address the International Court in Strasbourg. 

Nadežda Satarić from association “Amity” said that it is noticeable that there is no intergenerational respect and solidarity, and that it is negative to move age limit for retirement of women, so as reducing the income of those who were regularly paying their duties. 

“Furthermore, this is encouraging people to work in the shadow zone, since it is questionable to pay your dues when there is no guarantee that one will have pension in the future”, said Satarić, adding that it is a wrong message to the youth who are just starting their jobs or looking for employment. 

“Pension is not social, but economic category, and that how we should treat it”, she said. 

Source: B92/Tanjug ​

Participants at the debate were: Snežana Šantić (Association of Pensioners of Serbia), Mihajlo Đorđević (Association of Pensioners Independence), Miladin Kovačević (Republic Institute for Statistics), Radmila Simić (Red Cross Belgrade), Vladimir Jurić (Generali Group for Managing Voluntary Pension Fund), Marija Martinović (Union Independence), Gradimir Zajić (ISP Network), Milutin Vračević (Red Cross Serbia), Nataša Todorović (Red Cross Serbia), Lidija Kozarčanin (Republic Institute for Social Protection), Nadežda Satarić (Amity), Slobodan Vučković (CDF), Ljuban Žigmund (SSSS), Milan Nešić (Institute for Social Insurance), Nataša Vučković (CDF), Zoran Stojiljković (Faculty of Political Sciences), Milan Kovačević (Consultant), Dragoljub Mićunović (CDF) and others. 

Center for Democracy Foundation​