The public got a wrong perception about how much the pensions will increase after there was talk in the past period about a record increase in September pensions, but in fact it is a legal adjustment, which should maintain the value of the pension, he said in the interview for "Sloboden" press" university professor Jadranka Mršić.

The published percentage of pension growth of 6,8 percent has already caused a storm of reactions from pensioners, who say that they did not expect such a percentage for the "record increase of pensions". There is also dissatisfaction with the fact that those with small pensions will receive much less additional money than those with high ones.

Mršić was involved in the reformation of the pension system, i.e. in its transformation into three pillars - state, mandatory private and voluntary pension pillar. She is also the former general director of KB First Pension Company.

The PIOM Fund announced that September pensions are increasing by 6,8 percent. In absolute terms, as calculated by "Sloboden pechat", these are increases from 699 to 4.099 denars. With this increase, we will once again have very low pensions of approximately MKD 11.000. Is such an increase in pensions with the same percentage for everyone fair?

– The announced increase in September pensions from PIOM is based on their alignment with the increase in the cost of living and the average paid salary, which is in accordance with the latest amendments to the Law on Pension and Disability Insurance. The interpretation that pensions are "increasing" is wrong, in fact, their economic value is adjusted, which decreased in the previous period due to the increase in prices and in relation to salaries that grew during that period. For those reasons, the absolute amount of the increase in individual pensions is different because the purpose of the adjustment is to maintain the value of the pension that was determined when exercising the right to a pension, and not to increase it. With the adjustment, no correction is made to the amount of the acquired pension, which is determined based on the amount of wages that the pensioner received during the course of work.

The misunderstanding of this adjustment to pensions, a right established by the Law on Pension and Disability Insurance, was influenced by the large number of media reports about the record increase in September pensions, but also by the occasional increases in the same absolute amount of all pensions that were practiced in the past years.

It is important to raise awareness among the public that the pension increase announced in this way is not the result of the will of the government or a gift for pensioners, but is a legal right to compensate for the lost value of pensions due to the increase in prices in the past period. It is an act to mitigate the erosion of pensions and is a key element of the right to a pension as a social security right.

From the data of the PIOM Fund, it can also be seen that those who exercised their right to a pension until 1996 have a higher minimum pension than those after 2002. What is that due to?

- The amount of pension is determined according to the legal regulation that is valid during the period of exercise of the right to pension, and on that basis differences arise in the amount of pensions of the beneficiaries who exercised that right in different periods of time. This is particularly noticeable among pension beneficiaries with minimum pension amounts, but also among those with maximum pension amounts because the Law separately regulates the amounts of minimum and maximum pensions.

Will those who voluntarily joined the second pension pillar go with lower pensions than those who are only in the state PIOM Fund and can they only transfer to it?

– The amount of their pension will depend on the amount of salary and the contributions they paid in the second pillar, as well as the length of time of payment and the amount of capitalization of the funds in their accounts in the funds from the second pillar. Therefore, the effect of the decision to voluntarily join the second pillar is different for each of those insured persons and cannot be generalized for all. The legal amendment enabled a group of voluntary insured persons in the second pillar, who were found to be receiving a lower pension than the pension they would have received if they had remained in the first pillar due to the short period of capitalization of their contributions in this pillar, to return to the first pillar.

As one of the creators participating in the creation of the two-pillar pension system, are you satisfied with the results achieved by the system or maybe it is time for a new reform?

– The pension system does not function in isolation by itself and there is no ideally set system. It is related to the state of the economy, the labor market, and social policies, and its state can be influenced by changing the rates of pension contributions, conditions for the amount of pension and retirement. Therefore, it should be monitored, examined and changed in order to reconcile the observed deviations of the real economic and demographic data in relation to the projected ones on the basis of which the reformed system was designed. The effects on pensions in the second pillar should also be monitored and legal changes should be made accordingly to eliminate possible negative consequences. It is positive that these needs were understood and accepted as a necessity, so in the last few years appropriate changes have been made to the system by the competent institutions.

Lower pensions will be calculated in the future

Professor Mršić reveals in the interview that a gradual reduction of the "replacement rates" for the members of the first pillar and for the members of the second pillar for the part of the pension they will receive from the first pillar is foreseen. This means that future retirees will be charged lower pensions compared to the current formula.

- This reduces pension costs, which is one of the goals of the reform of the pension system and the introduction of a three-pillar pension system. The need for measures for financial consolidation of the system results from the significant economic and demographic changes that were previously identified, which are intensifying during this century and which affect the reduction of income, and at the same time, the increase of the costs of the pension system. By investing in voluntary pension insurance, additional income for retirement days is realized and the effect of the reduction of pensions based on the first pillar is corrected - says Mršić.

The replacement rate is a legally determined percentage, with which, when exercising the right to use a pension, the amount of the pension is determined.