The Academic Plenum has highlighted a serious inconsistency in how pensions for future retirees are calculated in Serbia, stating that President Aleksandar Vučić focuses primarily on current pensioners while leaving future retirees to fend for themselves.
According to the Plenum, the Pension and Disability Insurance Fund (PIO) formula calculates pensions based on the gross salary base (the net salary amount on which contributions were paid) and the average salary in Serbia. In the social security system, gross salary bases are capped at five times the average monthly net salary, which for 2025 equals 656,425 dinars per month (7,877,100 dinars annually), or 5,610 euros per month (67,326 euros annually).
Meanwhile, the Statistical Office of the Republic of Serbia publishes average net salaries, not the gross bases used to calculate contributions. The Plenum notes that this cap on the maximum monthly contribution base creates a problem: employees with higher salaries pay contributions only up to the cap, while the remainder of their income is not covered by the pension system.
As an example, managers in foreign companies earning 20,000 euros net per month have contributions paid only on 5,610 euros, leaving 14,390 euros unpaid in the pension system. They still pay personal income tax, which does not affect their future pension. At the same time, the Statistical Office includes the full salary in the average, artificially inflating the reported average salary. For August 2025, the official average is 105,590 dinars, reducing pensions for all other insured workers.
In practice, the Plenum explains, a highly qualified teacher earning 100,000 dinars net would receive a pension of around 61,800 dinars based on the official average, but approximately 88,000 dinars using a more accurate average based on contribution bases—a 43% difference in favor of fairer calculation. The Plenum argues that the current system systematically undercuts future pensions.
To address this, the Plenum proposes two solutions: either the Statistical Office should publish the average gross contribution base, which the PIO Fund would use in pension calculations, or the fivefold salary cap for contributions should be removed so that contributions are paid on the entire salary.
“Until this changes, most employees will continue to receive pensions lower than what their work and contributions merit. Only by standardizing the methodology and removing discriminatory limits can the pension system become transparent, fair, and sustainable,” the Academic Plenum concluded.
