SEMINAR ON PENSION REFORM HELD IN RIJEKA

RIJEKA, April 12 (Hina) - The reform of the pension system is one of the biggest reforms ever because it covers 938,310 participants into whose accounts around two billion kuna have been paid, Croatian Labour and Welfare Minister Davorko Vidovic said at a media seminar on the pension reform in Rijeka on Saturday. #L# The fifth media seminar on the pension reform was organised by CARANA Corporation and World Learning on behalf of the Labour and Welfare Ministry, the Agency for the Supervision of Pension Funds and Insurance, the Central Register of Insurees and the Croatian Pension Insurance Institute. The event, which is held under the sponsorship of the U.S. Agency for International Development, has pooled some 30 reporters and representatives of the organisers of the event. Vidovic recalled that the pension reform included the establishment of seven pension funds whose profit in 2002 totalled 11.2%. Around 84% of all insurees have chosen their pension fund independently, which shows that a significant number of them did not do so and for the reform to succeed, insurees must be additionally educated, Vidovic said. "The new pension system has avoided the mistakes of some other transition countries, a central register of insurees was established, the disintegration of the pension system based on generation solidarity was avoided and the pension industry as a significant investor in the market was started," the minister said. Speaking about the drawbacks of the reform, Vidovic mentioned a 20% drop in the projected 2.5 billion kuna worth of payments (0.33 million euros) into the second pension pillar. The second pillar was joined by less people aged between 40 and 50 than expected. Also, the estimated average salary is higher than the actual average and by the end of 2002 investment funds invested around 78% of the collected money into government bonds. Vidovic believes that bodies of local administration are not informed sufficiently about possibilities of investment through "the pension industry", especially as regards long-term infrastructure projects. The course of the reform is followed constantly, the minister said, adding that related laws and by-laws should be permanently adjusted to the market. The seminar in Rijeka will also include debates about pension insurance based on generation solidarity, the Law on Obligatory and Voluntary Pension Relations, the progress of the pension reform and compulsory pension funds. (hina) rml