The Serbian pension system in transition: A silent break with Bismarck
The pension system in Serbia was set up as Bismarckian earnings related system almost one hundred years ago. At the outset of the transition process at the beginning of 21st Century, the pension system underwent bold reforms. Despite suggestions from the World Bank to adopt a three-pillar s...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Faculty of Economics, Belgrade
2020-01-01
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| Series: | Ekonomski Anali |
| Subjects: | |
| Online Access: | http://www.doiserbia.nb.rs/img/doi/0013-3264/2020/0013-32642025105M.pdf |
| Summary: | The pension system in Serbia was set up as Bismarckian earnings related system
almost one hundred years ago. At the outset of the transition process at the
beginning of 21st Century, the pension system underwent bold reforms.
Despite suggestions from the World Bank to adopt a three-pillar system that
would involve a break with the Bismarckian heritage, reforms concentrated on
parametric adjustments that strengthened the link between previous earnings
and pension benefits. However, as this paper shows, the Bismarckian
earnings-related system has subsequently been silently challenged. On the
basis of an analysis of the current and perspective replacement rates for
various earning levels and pension variation indicators, we show how the
contributions/ benefit link has been undermined. These policy changes have
not been defined or understood as a new strategic course of action, nor have
the strategic options been debated and analysed. These silent reforms have
seemed to be a “quick and easy” solution to tackle high public expenditures
and deficits without understanding their implications, and that breaking up
with Bismarck implies significant transition costs. |
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| ISSN: | 0013-3264 1820-7375 |