An increasing number of people in Serbia are paying a private pension. The latest data from the central bank show that payments are growing and that there were slightly more than 375 million euros 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, it is almost two and a half times more.
Today, about 200,000 people pay a private pension in Serbia. Most users are between 40 and 60 years old, and the average payment is around 350 euros per month. The answer to the question of how much they can expect is the following – the amount of pension depends on the yield of pension funds, and on the example of a yield of five percent per year, for payments of 15 euros per month for 25 years, the monthly payment for 20 years would be 65 euros.
The return of funds for the second quarter of this year was somewhat lower, about three percent, but it is important to say that we do not look at the return for one year, but the average for the entire payment period. It should also be said that in previous years, there were funds with yields of more than 9 percent.
Small payments over a long period of time can provide a decent income for retirement, and you need to start with them as early as possible.
The same amount of paid funds with the same rate of return provides a significantly higher amount of pension if the payments start earlier, since the private pension does not depend on the length of service, but on the regularity and length of the period in which you make 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 domestic or foreign citizens. It is an increasingly common practice for parents to start saving for their children immediately after their birth. The amount to be paid is on a voluntary level, as is the pace of payment.
Another individual or company can pay into the fund on behalf of a natural person, and this can be done by a trade union for its members, as well as employers for its employees.
Withdrawal of funds
The earliest years to officially become a pensioner in Serbia are 58, so since 2011 it has been the lower age limit for withdrawing funds that you paid into a private fund. Users of the funds must start withdrawing at the latest at 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 need to first find one of the safe and registered funds. In addition to its financial condition and rate of return, one of the factors in choosing a fund should be the amount of fees paid for the services of the management company, 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, the signing of membership agreements and payment of fees – when paying pension contributions (maximum 3 percent of the value of payment) and for managing a voluntary pension fund (up to 2 percent of the value of the fund’s assets annually), Kamatica reports.
