DRAFT BILL ON PENSION REFORM READY FOR SECOND READING

( Editorial: --> 2249 ) ZAGREB, March 25 (Hina) - The Croatian Government will see that no one suffers from the introduction of a new pension system, Croatian Deputy Prime Minister Ljerka Mintas-Hodak told a press conference in Zagreb on Wednesday. A radical pension reform, which would lead to the reduction of pension allowances, is not possible in Croatia, she said. A gradual transition is necessary so that all those who are to be retired - regardless whether according to the old or the new system - could retire under the same conditions, Mintas-Hodak said. Mintas-Hodak is chairing the Commission for Pension Reform, which has prepared a draft bill on pension insurance for the second reading in parliament. Considerable improvements have been entered into that draft, especially when it comes to the transition from the old into the new system, Mintas-Hodak said. She added that solutions for the system of disability insurance were improved as well. The draft bill on pension insurance regulates the first out of three pillars of pension reform, the so-called general obligatory insurance. Although it is possible that the draft could go into the third reading, the new law should take effect on January 1, 1999. The model of Croatia's pension reform is not based on any model in the world as the reform of the pension system after certain changes to the original text of the law had been adapted to Croatia's needs, Mintas-Hodak said. Croatia's pension system is a system of general compulsory insurance, based on generation solidarity - those who work have to give contributions from their salaries for pension allowances of those who are retired. With the pension reform the government will introduce a mixed pension system - general obligatory insurance, compulsory capitalised saving and voluntary insurance. (hina) jn rm /mb 251620 MET mar 98