Although the representatives in the House of Representatives of the Federal Parliament voted without a single vote against out of the 86 present in favor of changes to the Law on PIO/MIO, a kind of obstacle is yet to come.
If the new legal solution is not confirmed at the session of the House of Peoples scheduled for today (Friday), pensioners in the Federation of Bosnia and Herzegovina will remain on the existing formula and a symbolic increase in their income of barely five percent instead of the predicted almost 17 percent, writes Avaz.
Unsustainability of the solution
In the umbrella organization of pensioners, they remind that the proposed legal solution is the result of long-term and, especially at the beginning, difficult negotiations of representatives of the Association of Pensioners/Pensioners with the Government of FBiH and the Federal Institute of PIO/MIO.
In an interview with “Dnevni avaz”, Redžo Mehić, president of the Alliance, detailing the course of events, says that at the first meeting on March 12, 2024, between all actors, when presenting specific requests for amendments to the Law on PIO/MIO, the negotiation team of the Alliance did not find the understanding and approval of the other side.
– They assured us that it is risky to unpack the existing Law, especially Article 79 of the Law, which refers to the adjustment of pensions, and that by changing it, the long-term viability of the pension system, and thus the possibility of paying pensions, would be called into question. We referred to the unsustainability of the solution in this article and the practice of neighboring countries, and remained of the opinion that instead of GDP, the average salary in the Federation of Bosnia and Herzegovina must be taken as one of the parameters for adjusting pensions – reminds Mehić.
According to him, all the demands of the Association, except for the monetary supplement at the end of the year, were accepted by the Government and incorporated into the Proposal for Amendments.
Create the conditions
He reminds that there is no ideal law, nor ideal amendments to the law, including these, but at the moment, he says, these are realistic possibilities.
– We know that there were amendments to the Draft Law, which the Government could not adopt because their proponents did not take into account that the basis for calculating the pension is the number of points, which is obtained based on years of pensionable service and the amount of paid contributions for PIO. In the belief that the House of Peoples will also adopt the Bill on January 23, the conditions are being created for the long-promised fairer adjustment of pensions in 2026. It is planned that from January 1st for all pensions it will be around 11% and from July 1st around 6%, which is far from necessary. Pensioners would be more satisfied if the growth in the prices of basic foodstuffs, medicines and communal services were curbed, because that is what pensions are spent on – Mehić points out.
Pensioners will pay VAT of 750 million KM
– The budget foresees about four billion and 400 million KM for the payment of pensions in 2026, which is about 49.45 percent of the FBiH budget. Pensioners will spend all these funds in the Federation of BiH and pay VAT on them in the amount of approximately 750 million KM. According to the opinion of eminent economists, this part of the budget of the Federation of BiH is developmental, and not social, as some consider it, because it directly affects the development of the economy, especially service activities – Mehić believes.
