Everything you need to know about Croatia’s pension system (in 2021)

Retired men on pension in Croatia
Image by A_peach

Many countries around the world have some form of state-run retirement program. Croatia has a mandatory pension system that employers pay into on behalf of their employees. The amount paid is scaled to their salary. Once workers reach a certain age, they can withdraw from pension (called “mirovina”). The amount of pension accrued is directly related to the amount paid into the system by your employers during your working life.

In this post, we’ll cover:

  • Pension structure
    • Mandatory pension funds
    • Optional pension funds
  • Types of pension including disability and family collection
  • Retirement ages
  • Work minimums

How Croatia’s pension system is structured

The Croatian pension system is defined by the law on pension insurance called “Zakon o mirovinskom osiguranju“. The system is divided into 3 pension funds called “stup mirovinskog osiguranja”. Some are mandatory, but not all. We’ll go through each one in detail.

The pensions funds are:

  • Prvi stup (First fund)
  • Drugi stup (Second fund)
  • Treći stup (Third fund)

#1 Prvi stup (First fund)

Prvi stup is mandatory and it is under the jurisdiction of HZMO – Hrvatski zavod za mirovinsko osiguranje (Croatian pension insurance institute).

For this fund, employers pay 15% of an employee’s bruto salary monthly into the state treasury. Bruto salary is the net amount an employee receives on their bank account each month plus taxes. The money collected in this fund is used for the payment of pension to existing pensioners.

The first and the second funds are mandatory, but some people are first fund users only. If the employee is only in the first fund, the employer pays 20% of bruto salary instead.

People in the first fund usually:

  • Were at least 50 years of age in 2002 when the second fund was founded
  • Were between 40 and 50 years of age in 2002 when the second fund was founded but they didn’t become voluntary users of the second fund at the time.

#2 Drugi stup (Second fund)

Drugi stup is also mandatory and it is defined by the law on mandatory pension funds called “Zakon o obveznim mirovinskim fondovima” and the law on pension insurance companies called “Zakon o mirovinskim osiguravajućim društvima“. It is under the jurisdiction of private pension companies, which are supervised by the HANFA – Hrvatska agencija za nadzor financijskih usluga (Croatian financial services supervisory agency).

For this fund, employers pay 5% of an employee’s bruto salary monthly into one of the mandatory pension funds of the employee’s choice. If an employee decides to change the pension fund, all the previously deposited money transfers from the old fund to new fund.

Citizens can track the amount of money paid into their second fund at Središnji registar osiguranika – REGOS webpages. To register, visit any FINA office and ask for a PIN (personal identification number) or you can use an existing account with specific banks or mobile companies to verify your identity and access your drugi stup balance. For example, I am able to use the PBZ #withKEY function to verify my identity even though PBZ has nothing to do with my pension.

#3 Treći stup

Treći stup is optional and it is under the jurisdiction of private banks and insurance companies. This fund can be compared to investment funds. The money paid into this fund is invested into stocks, bonds, and cash deposits.

People who invest in this fund have the right to državna poticajna sredstva (state incentives) which means that the state stimulates investment into this fund. The state will match up to 15% on the total amount an employee invests into this fund within a calendar year, up to 750 kuna maximum.

The money invested in the third fund can be withdrawn at the age of 55, if you started investing after January 1, 2019. If you started to invest before January 1, 2019, you can withdraw the money from the third fund when you turn 50. To pick up the saved money from the third fund, you don’t have to meet the requirements of retirement for the first or second fund.

Working life, length of service and retirement age

There are three important terms to know when discussing qualification for Croatia’s pension: radni vijek, radni staž and mirovinski staž.

Radni vijek

Radni vijek refers to your “working life”. Working life is the period of time during which you were capable of working, regardless of whether or not you actually worked during this time. For those who have graduated high school, radni vijek is calculated starting from the age of 20. If you have a bachelor’s degree, then it starts from age 23. If you have a master’s degree, radni vijek starts from age 26.

Radni staž

Radni staž means “length of service”. This refers to the amount of time you were employed in Croatia during which your employers paid into the pension fund(s) on your behalf.

It does not refer to part-time or full-time employment, but instead is calculated by number of years paying into the system. Even if you worked only 1 hour per day within a calendar year, it is calculated as 1 year of staž (service). The absolute minimum radni staž you must have to retire is 15 years, except for disability pension.

These years of service are used as a qualification for withdrawing pension, which we’ll discuss further down in this post.

Mirovinski staž

Mirovinski staž means “retirement age”. The standard retirement age in Croatia is 65 years. However, there are different age minimums for retirement, depending on the type of pension and a few other factors. In the next section, we’ll review each type of pension and when a worker can retire with each.

Types of pension in Croatia

To collect pension from either the mandatory prvi stup or drugi stup, you must meet certain criteria. These criteria are broken down into 4 types of pension, which may or may not relate to your personal retirement from the workforce. The types of pension in Croatia are:

  1. Starosna mirovina (Old-age pension)
  2. Prijevremena starosna mirovina (Early old-age pension)
  3. Invalidska mirovina (Disability pension)
  4. Obiteljska mirovina (Family pension)

Now, we’ll go through each type of pension one-by-one in greater detail to explain the criteria you must meet to qualify.

#1 Starosna imovina (Old-age pension)

The right to starosna imovina is for people who:

  • Are at least 65 years of age
  • Have contributed into pension system for 15 years

Currently, there is a transitional period between 2020 and 2029 during which women have the right to retire early as shown in the table below. From January 1, 2030, women and men will have the same retirement age for starosna imovina.

Transitional yearAge
202062 years and 6 months
202162 years and 9 months
202263 years and 0 months
202363 years and 3 months
202463 years and 6 months
202563 years and 9 months
202664 years and 0 months
202764 years and 3 months
202864 years and 6 months
202964 years and 9 months

The right to starosna imovina on the basis of the long-term insurance is for people who:

  • Are at least 60 years of age
  • Have contributed into pension system for 41 years

The age minimum for retirement under starosna imovina can be lowered for these groups:

  • People who work in very demanding job positions
  • People who work in job positions dangerous to their health
  • People who work in job positions where their physiological functions decrease over the time (opera singers, dancers, chimney cleaners, etc.)
  • People with disabilities
    • Dystrophy and related muscular and neuromuscular diseases
    • Paraplegia
    • Cerebral palsy and polio
    • Multiple sclerosis and related diseases
    • Blind persons
    • Deaf persons
    • Rheumatoid arthritis and other systemic inflammatory diseases of the joints and connective tissue
  • Functional disorders prevent persons from moving without a wheelchair
  • Down syndrome

#2 Prijevremena starosna imovina (Early-old age pension)

The right to prijevremena starosna imovina is for people who:

  • Are at least 60 years of age
  • Have contributed into pension for at least 35 years

Currently, there is a transitional period between 2020 and 2029 during which women have the right to retire early as shown in the table below. After this period, from January 1, 2030, women and men will have the same retirement age for prijevremena starosna imovina.

Transitional yearAgeYears of work
202057 years and 6 months32 years and 6 months
202157 years and 9 months32 years and 9 months
202258 years and 0 months33 years and 0 months
202358 years and 3 months33 years and 3 months
202458 years and 6 months33 years and 6 months
202558 years and 9 months33 years and 9 months
202659 years and 0 months34 years and 0 months
202759 years and 3 months34 years and 3 months
202859 years and 6 months34 years and 6 months
202959 years and 9 months34 years and 9 months

The right to prijevremena starosna imovina due to bankruptcy of an employer applies to people who:

  • Have the right for prijevremena starosna imovina (as shown above)
  • Have been registered as an unemployed person at HZZ (employment service) for a continuous period of at least 2 years after the bankruptcy

#3 Invalidska mirovina (Disability pension)

There are 3 types of disability pension.

a) Invalidska mirovina

The right to invalidska mirovina is for people who:

  • Have partial or complete loss of ability to work
    • Partial loss – Persons with reduced working ability who can work up to 70% of working hours
    • Complete loss – Persons with a permanent loss of working ability
  • Fulfill the condition of staž (service)
    • Persons who lost their working ability before the age of 65 have the right to invalidska mirovina if they worked at least ⅓ of their working life (radni vijek)
      • Here is an example: You are 56 and had an accident that resulted in the partial loss of your ability to work. You have a master’s degree, so your radni vijek started when you were 26. This means that your total working life (radni vijek) was 30 years. To get disability pension, you must have worked 1/3 of your radni vijek, which equals 10 years. So, your years of service must be at least 10 years to qualify.

b) Privremena invalidska mirovina

Disabled persons who have been unemployed long-term after they finished job training through professional rehabilitation have the right for a temporary disability pension under these conditions:

  • They were unemployed for at least 5 years after the rehabilitation concluded
  • They were unemployed when they turned 58 years old
  • They haven’t rejected any job offers from HZZ (Unemployment office)

More information is available here.

c) Professional rehabilitation

Professional rehabilitation is government-provided training to disabled persons for specific jobs to preserve their remaining working ability.

More information is available here.

#4 Obiteljska mirovina

Family members of deceased persons (such as life partners, spouses, parents, and children) have the right to obiteljska mirovina if some requirements are met.

Detailed requirements can be found here.

Have questions about Croatia’s pension system? Let us know in the comments.

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