The number of pensioners in Bosnia and Herzegovina has almost equaled the number of employed workers, and experts warn that the existing pension system could become completely unsustainable in the coming years if serious reform measures are not taken urgently.
According to estimates, entity governments are already missing more than 400 million KM every year for the payment of pensions, while by 2032 that amount could grow to as much as 1 billion 600 million KM. Večernji.ba.
A 20-year problem
Demographers warn that this is a problem that has been pointed out for more than two decades, but which authorities at all levels mostly ignore. Negative demographic trends, declining birth rates and mass emigration of the population are cited as key reasons.
Currently, there are only 1.2 employed workers per pensioner in Bosnia and Herzegovina, while the average in the countries of the European Union is much more favorable and amounts to 1:1.8.
In order for Bosnia and Herzegovina to reach the European average, it would be necessary to employ several hundred thousand new workers, which is almost impossible in the current circumstances due to the lack of manpower.
Negative trend
Particularly worrying data comes from the Federation of Bosnia and Herzegovina, where the ratio of employees and pensioners is almost equal. According to data from the Federal Institute for Pensioners, there are currently only 1.19 employed workers per pensioner.
Economic expert and federal representative Admir Čavalić warned that this is an extremely negative trend.
“When the Bismarck pension fund was formed, in Germany there were eight workers to one pensioner, and the golden rule is four to one. We are at 1.19 to one,” said Čavalic.
The Federal Institute for Pensioners states that the average number of insured persons in 2025 was 544,730, while the average number of pension beneficiaries was 459,578.
“Although from the aspect of sustainability of the system it would certainly be preferable if the ratio of insured persons and pensioners were more favorable, we note that the said ratio has been moving at approximately the same level for the last ten years,” Tomislav Kvesić, spokesman for the Federal Institute for PIO, told Faktor.
All lower pensions
The poor ratio between the number of employees and pensioners directly affects the amount of pensions, which is why a large number of citizens receive amounts insufficient for basic living expenses.
Additional concerns were caused by changes to the Law on PIO in FBiH, especially Article 81, which regulates the calculation of the lowest pension.
According to earlier legal solutions, a person with 15 years of service and over 65 years of age could exercise the right to the lowest pension, which currently amounts to 666.72 KM.
However, after changes in the law, the minimum amounts in certain cases become significantly lower. Thus, according to the new calculation model, an insured person with 15 years of service could receive a pension of only 434 KM, provided that during his entire working life he had a salary equal to the average salary in the Federation of Bosnia and Herzegovina.
The Federal Institute for Pensioners explains that such cases are rare in practice because most citizens do not have stable and equal income during their working life.
“Nevertheless, if we were to imagine three scenarios in which the insured have a working experience of 15, 20, or 25 years, with a salary that is half of the average salary in each year, all three insured would, according to the current method of calculation, receive a pension lower than the lowest pension prescribed by Article 81 of the PIO Act,” the Institute stated.
According to the current value of the general point, pension calculations in such cases look like this:
for 15 years of service: 197.55 KM
for 20 years of service: 263.40 KM
for 25 years of service: 329.25 KM
If the same persons were entitled to the lowest pension according to the new rules, the amounts would be:
15 years of service: 434.62 KM
20 years of service: 470.83 KM
25 years of service: 507.05 KM
Experts warn that without serious economic and demographic measures, Bosnia and Herzegovina will face even bigger problems in financing the pension system, while future generations of pensioners will be faced with decreasing incomes and an uncertain old age.
