Retirees will continue to insist that the PIO Act introduce a safeguard clause under which these benefits will not fall below 50 percent of average earnings.
Although retirees have welcomed the long-announced adoption of the pension adjustment formula so that, after four years, they can finally know when and how much their pensions will be increased, they are unhappy that the amended PIO Act did not include a safeguard clause on which they insisted. That is, why have the authorities avoided the fact that they have introduced in the law a provision that would prevent the average pension in average earnings from falling below 50 percent. What about this Swiss formula is quite certain.
However, the fact that this proposal was accidentally or intentionally omitted from the bill does not deny that pensioners will stop insisting that it be introduced sooner or later, says Djuro Peric, former president of the Serbian Pensioners’ Union.
He points out that this issue will in future be one of the main issues that the PUPS will ask both before and after the election and look at how to resolve it with its coalition partners, because without this safeguard mechanism, pensions will continue to fall. And now they are already below 50 percent of average earnings.
Milan Nenadic, president of the Federation of Vojvodina Pensioners, says that this was one of the important provisions that needed to be included in the Law on Pension and Disability Insurance, so that pensions would not be further impaired. Which will be especially pronounced when there is a significant increase in earnings.
-Then retirees will continue to insist that this issue is resolved in order to protect this multi-million population. Earlier years, the rule was that if pensions fall below 60 percent of average earnings, automatic adjustment is made. Now less than that is demanded, he says.
Asked if the latest increase in public sector earnings of about 9.6 percent on average will reflect a fall in the average wage, he says it won’t in 2020 but in 2021 it will. It remains for the government to declare how it will reimburse all reduced pensions in the past four years for some 700,000 injured retirees. Because sooner or later the issue must be resolved. Namely, the government was offered to say on its own and choose the way to repay the debt, all in accordance with financial possibilities, says Nenadic.
On the other hand, Jovan Tamburic, president of the Association of Military Retirees Unions of Serbia, says that pension adjustments in 2020 will be made with the January pension payable in February 2020. This is to bring pensions into line with half of price growth and half of earnings growth between June 2018 and June 2019 and June 2017 to June 2017. In this way, rising prices and wages in the second half of 2019 will not be factored into the pension adjustment formula in 2020, but only in 2021, which again means that retirees will be harmed, says Tamburic.
He adds that the implementation of the adopted model of pension adjustment by economic experts indicates a further reduction in it relative to average earnings. At the same time, there is a prudence of reducing the real value of pensions in situations where price or inflation growth would be higher than wage growth, he concludes.
