Raising the minimum wage to 1,000 KM, which in the gross amount is actually 744 KM more, caused a real storm in the Federation of Bosnia and Herzegovina. One of those who supported this law was the Minister of Agriculture Kemal Hrnjić (NiP), who, however, admitted that one of the direct reasons was the higher burden on salaries in order to fill the funds.
There is no money
– Almost 450 thousand pensioners must not be questioned in this country. We now have five billion and 100 million KM interventions from the budget, in order to pay pensions in 2024. Therefore, the PIO Fund lacks half a billion. Who will pay for it if the employers do not want to cooperate with the Government – said Hrnjić.
And indeed, the demographic trends in Bosnia and Herzegovina are worrying. In our country, more people have been dying than being born for a long time, and when you add to that the fact that citizens of working age are moving away at a young age, the question is whether the pension systems in our country are sustainable at all.
Black projections
In a conversation with “Daily avazEconomic analyst Faruk Hadžić says that projections of the pension system in the Federation of Bosnia and Herzegovina show that serious challenges await us in the coming years.
– The key problem is the growing number of pensioners, which significantly exceeds the growth in the number of employees, which leads to a growing financial gap between collected contributions and pension expenditures, along with the growth of pensions of existing pensioners. According to available data, the difference between collected contributions and pension expenditures will increase from 528 million KM in 2024 to more than one billion KM in 2032, which indicates that this increase of almost half a billion marks in less than ten years means long-term unsustainability. current model. At the same time, the share of contributions in the total expenditure on pensions will fall from 85 percent to 80.57 percent, which additionally confirms the increasing pressure on the budget of the Federation of Bosnia and Herzegovina – states Hadžić.
Hadžić points out that, although contributions per worker are increasing at a stable rate of approximately three percent per year, this is not enough to amortize the growth of pension expenditures, which amounts to five percent per year due to regular adjustments of pensions and the increase in the number of beneficiaries.
Reforms are necessary
Hadžić believes that the scenario of the collapse of the pension system without reforms is very certain, and negative factors such as demographic decline, emigration of young workers and economic stagnation could further worsen the situation.
– Reforms are necessary – from increasing employment through active measures on the labor market and encouraging private pension funds, to adjusting the contribution rate and creating a sustainable financing model. Without these measures, the pension system could threaten the financial stability of the Federation of Bosnia and Herzegovina and the safety of future pensioners – according to Hadžić.
– If there are no urgent structural reforms, it is expected that the financing of pensions will become almost unsustainable – believes Hadžić.
