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The latest data from the National Bank of Serbia confirm that more and more citizens decide to pay their pensions privately. Thus, at the end of the second quarter of this year, up to 5,514 more people were included in this type of insurance than in the same period of the previous year.
At the same time, the net assets of voluntary pension funds increased 1.1 percent compared to the first quarter of this year, so that at the end of the second quarter it reached the amount of 45.1 billion dinars. That is, almost two and a half times more than in 2016.
It is obvious that the corona virus pandemic, which shook many economies this year, did not significantly affect voluntary pension insurance, so providing additional funds for the old days remains an important item in many citizens’ budgets.
Today 203,039 people pay private pensions in Serbia. Most users are between 40 and 60 years old and the average payment is around 4,000 dinars a month.
Voluntary pension funds can be paid by individuals, for themselves and others, as well as by employers for their employees. According to central bank analysis, in the second quarter of this year, 42 percent of payments were individual, 34 percent were payments from employers to their employees, while 24 percent were related to payments through of pension plans.
Young generations are thinking more and more about whether they will be able to survive with the amount that will come to them in the future from the PIO fund, which is why more and more people are opting for private pensions, that is, affiliation to one of voluntary pension funds, to allocate part of their income. as a savings for old age.
What does the amount of the private pension depend on?
The amount of the pension depends on the returns obtained by the pension funds, and the return on the funds for the second quarter of this year was somewhat lower, around three percent. However, it is important to say that we do not look at the performance of a year, but the average of the entire pay period. It should be noted that in previous years there were funds with yields above nine percent.
In the example of a five percent annual return, for payments of 2,000 dinars per month for 25 years, the monthly payment for 20 years would be 7,483 dinars. According to the same principle, if the fund’s profitability is nine percent, every month for 20 years, citizens would receive a pension of 18,186 dinars.
The annual returns of the funds depend on the sources in which they invest the money, whether it be bonds, stocks or interest in the bank.
How to join a pension fund
You need to find a safe fund first, and it is good to know that if you are not satisfied with the fund business you have chosen, you can change it.
After collecting information on rights and obligations, signing membership agreements and paying fees, when paying pension contributions (maximum 3 percent of the payment value) and to manage a voluntary pension fund (up to two percent of the value of the fund’s assets annually).
Who can pay
There is no lower age limit and anyone under the age of 70 can be a member of the fund, regardless of whether they are employed or not, or whether they are a national or foreign citizen.
It is an increasingly common practice for parents to start saving for their children immediately after they are born, because payments over a long period of time can provide a decent retirement income.
The amount that is paid is on a voluntary level, as well as the rate of payment, and the first years to officially become a pensioner in Serbia are 58, so since 2011 it is the lowest age limit to withdraw funds that you paid to a private fund.
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