Amendments to Article 81 of the Law on Pension and Disability Insurance concerning the calculation of the lowest old-age pension, which bring smaller amounts of pensions compared to the previous law, have attracted a lot of public attention.
The amendments to the law were approved by the House of Peoples of the Parliament of the Federation of Bosnia and Herzegovina on January 23, but the law is applied retroactively from January 1.
According to the old Law on PIO, a person with 15 years of service and 65 years of age had the lowest amount of old-age pension (currently 666.72 KM), and now that pension is 434 KM, if the person had a salary equal to the average salary in the Federation of Bosnia and Herzegovina for all 15 years.
We asked the Federal Institute for Pension and Disability Insurance to explain to us what if in those 15 years of service a person had a salary lower than the average in FBiH, for example, if he had half a point per year, that is, less than 1,500 KM.
We asked how much that person’s pension will be when he retires with 15 years of service and 65 years of service, then, how much the pension will be if he had half a point in each of the 20 years of service, that is, 25 years of service.
– In practice, it is almost impossible for the insured to achieve completely equal income during the entire working life, and therefore analyzes based on such an assumption are mostly theoretical.
However, 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 in each year was half of the average salary, 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 Pension and Disability Insurance Act (provided that other statutory conditions are also met). The lowest pension is guaranteed to persons residing in Bosnia and Herzegovina, and exceptionally to persons in countries with which BiH has concluded an agreement in this area (Croatia and Slovenia) – stated the Federal PIO Institute and added:
According to the current value of the general point, the said pensions would amount to
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 these persons met the conditions for payment of the lowest pension, they would receive the following amounts:
with 15 years of experience: 434.62 KM,
with 20 years of experience: 470.83 KM,
with 25 years of service: 507.05 KM.
A group of representatives in the House of Representatives of the FBiH Parliament requested before the FBiH Constitutional Court an assessment of the constitutionality of Article 81 of the Law on PIO, as well as the retroactive application of the law. Factor.
