Deputy Prime Minister Damir Polancec said on Thursday after the two sides finished the days-long negotiations that the current formula for the adjustment of pensions to the wage growth was not any longer viable due to long-term obligations and the current situation in the budget.
The previous formula, which is going to be reinstated on February 2006 and which is also called the Swiss formula, means that pensions will be adjusted twice a year to the figure calculated as a half of the sum of the growth of salaries and living costs. Polancec said this would ensure a rise in pensions.
Silvano Hrelja of the Croatian Pensions' Party (HSU), said that pensioners opposed this pension indexation.
Under the agreement on the investment fund, which is to start working by 5 August, 423,000 persons are entitled to indemnification. The debt is estimated at 13.8 billion kuna.
Pensioners will be able to claim their money back in two ways -- over a period of two years, namely during 2006 and 2007, in which case they will receive 50 per cent of the sum claimed, or over a period of eight years, in which case they will be paid back the entire amount.