Roughly 200,000 people contribute money to the fund, and here’s if it’s worth it (DETAILS)

Photo: Tanjug / Filip Krainčanić

The latest data from the central bank shows that payments are growing and that there were just over 45 billion dinars in pension funds at the end of the second quarter of this year. Compared to 2010, it is four times more and compared to 2016 almost two and a half times more.

Today some 200,000 people pay a private pension in Serbia. Most users are between 40 and 60 years old and the average payment is around 4,000 dinars per month.

Do you pay a private pension?

The answer to the question of how much they can expect is the following: the amount of the pension depends on the performance of the pension funds, and in the example of a return of five percent per year, for payments of 2,000 dinars per month for 25 years , the monthly payment for 20 years would be 7,483. dinars.

The return on funds for the second quarter of this year was somewhat lower, about three percent, but it is important to say that we are not looking at the return for one year, but the average for the entire payment period. It must also be said that in previous years there were funds with yields above 9 percent.

Small payments over a long period of time can provide a decent income for retirement, and you should start with them as soon as possible.

The same amount of funds paid with the same rate of return provides a significantly higher pension amount if payments start earlier, since the private pension does not depend on the length of service, but on the regularity and duration of the period in which you perform the payments and the way these funds are invested.

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. The amount to be paid is voluntary, as is the rate of payment.

Another individual or company can contribute to the fund on behalf of an individual, and the union can do the same for its members, as well as employers for their employees.

Withdrawal of funds

The first years to officially become a pensioner in Serbia are 58, so since 2011 it has been the lowest age limit for withdrawing funds that you paid into a private fund. Users of the funds must begin withdrawing funds no later than the age of 70.

How to become a member of a voluntary pension fund

Those who want a higher pension in the form of a supplement from private funds must first find one of the safe and registered funds. In addition to its financial condition and rate of return, one of the factors when choosing a fund should be the amount of commissions paid for the services of the manager, but it is important information that if you are not satisfied with the fund you choose 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 2 percent of the value of the fund’s assets annually).