Changes and amendments to the Pension and Disability Insurance Law, expected to be adopted by the end of this year, are intended to contribute to the establishment of private pension funds, as announced earlier. Representatives of the Capital Market Commission in the Parliament’s Committee on Economy, Finance, and Budget recently confirmed this.
The specific implementation of this initiative remains to be seen, especially as it has become apparent that the planned cessation of pension contribution payments is being abandoned. In line with the European Union‘s decision from 2015, the expectation is to abolish all state pension funds by 2035.
According to economic analyst Oleg Filipović, waiting for the final text of the legal solution and analyses is necessary to understand how private funds will enter the market.
“When talking about funds in general, our current law is very poor. We don’t have a precise definition of certain types of funds. Regarding pension, hedge, investment funds, the first problem is that they are managed by company managements, and according to existing law, one company can manage only one fund,” says Filipović.
He emphasized that our market is currently completely unattractive, primarily due to its small size.
“To open up the market, the law would have to clearly define what funds are. We now have the insurance market, which overlaps with pension funds, providing the opportunity for speculative approaches. Pension funds have limited investments, meaning that this money cannot be invested in any type of high-risk investment. Pension funds are under constant control, making them stable investments, such as government securities,” explains Filipović.
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