engleski

Voluntary pension saving in CEE countries: Possibilities for enhancement

Voluntary pension saving, or the third pillar of the pension system in CEE countries, can be seen as an enhancement of pension benefits based on the two mandatory pillars of the pension system. In Croatia, less than 10% of citizens opt for this savings option, with the average amounts saved being very low and insufficient to ensure a significantly better standard of living in old age. Nevertheless, the performance of voluntary pension funds can be considered satisfactory and there are favourable government incentives and better tax treatment of pension saving compared to other forms of saving. Voluntary pension saving is the only financial product in the Republic of Croatia that includes state incentives, fund returns and tax relief for employers. Considering the low level of coverage and contributions within the voluntary pension pillar in Croatia, but also in other CEE countries, the question arises as to the possible reasons for the low interest of employees in this type of saving. This is due to low financial literacy, lack of long-term predictable and transparent government policies and other unfavourable economic and social factors. The aim of this article is to present effective tools to promote pension saving and achieve higher participation in voluntary pension schemes. Research findings suggest that, in addition to traditional tax incentives, there are some new, effective types of financial (non-tax) incentives that are better suited to low-income savers, who are in the minority in the overall population of voluntary pension savers. These efforts should continue in the coming years and have an impact on the general attitude towards money and saving and thus on the overall financial behaviour of citizens.

CEE countries, pension system, financial literacy, incentives, voluntary pension saving

Ovaj rad je sufinanciralo Sveučilište u Rijeci projektom uniri-drustv-18-61, ZIP-UNIRI-130-5-20 and uniri-mladi-drustv-20-13