The agreement was reached at a meeting held on Tuesday and was signed by Croatian Prime Minister Ivo Sanader and HSU leader Vladimir Jordan.
Jordan told Hina after the meeting that according to the agreement, pensions would rise by four percent from 1 July.
The agreement says that a joint commission consisting of government officials and representatives of the HSU and other associations of retirees will consider the agreement of 23 December 2003 and adjust it to the economic capabilities of Croatia, taking into account the government's pre-accession economic programme on the road towards the European Union.