Most frequent questions (Q & A)

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Most frequent questions (Q & A)
 
1.        What is the difference between the pension company and the pension fund?
The pension company may be a joint-stock company or limited liability company the basic activity of which is establishing and managing pension funds.
A pension fund is completely separated from the operation of the pension company. Those are separate assets without the legal personality which are established for the purpose of collecting the assets by payment of the contributions by members of the pension fund and investing of those assets for the purpose of increasing the value of the assets of the pension fund in order to ensure payment of the pension payments to the pension fund members. A pension fund is owned by its members. It is managed by the pension company.
The assets of the pension fund do not belong to the pension company, nor are they a part of its assets, its liquidation or bankruptcy estate, nor may they be the subject of the execution for the purpose of settling a claim against the pension company. The assets of the pension fund are kept and managed separately from the assets of the pension company.
 
2.       What is the difference between the mandatory and voluntary pension funds?
Mandatory pension funds operate within the mandatory pension insurance on the basis of the individual capitalized savings (Pillar II.) while voluntary pension funds operate within the pension system as the voluntary pension insurance on the basis of the individual capitalized savings (Pillar III.).
In the mandatory pension fund, the insured persons that have the mandatory insurance in the system of mandatory pension insurance on the basis of generation solidarity (Pillar I.) must be insured, with the pension funds classified by the membership and the principles of investment into three categories: A, B and C, which mutually differ by the limitations of the membership with respect to the period until the date of retirement, and by the investment strategy and the limitations of investment. The decision on saving in a voluntary pension fund is completely individual, and the dynamics and the amount of saving completely depends on the possibilities of each member personally.
 
3.        How can I change my personal details?
Personal details can be changed by calling our toll free info telephone of our call centre 0800 0900, or by e-mail to mojamirovina@rmf.hr (link) with the identification data (account number, Personal Identification Number (OIB))
If a member changes the surname, a photocopy of the new identity card should be enclosed.
 
SELECTING THE MANDATORY PENSION FUND
 
1.        Where and how to join a mandatory pension fund?
The insured person may select the mandatory pension fund only and exclusively at the counter of the Central Registry of Insured Persons (REGOS), which is found in all the branch offices of the Financial Agency (FINA). The identity card should be presented and a form filled in, and the pension company, i.e. the mandatory pension fund to which the insured person wants to pay a part of his pension contributions should be selected. The place and way of joining the membership are the same for all the mandatory pension funds in the country. You can check the list of FINA branch offices here.
 
2.        Who must select the mandatory pension fund and in what term?          
The insured persons that are insured in the system of the mandatory pension insurance on the basis of generation solidarity according to the Pension Insurance Act and which are under 40 years of age must be insured on the basis of the individual capitalized savings in the pension fund which they select themselves.
The mandatory pension insurance on the basis of the individual capitalized savings is established with the day of establishing the insurance in the system of mandatory pension insurance on the basis of generation solidarity according to the Pension Insurance Act, and, since that day, the obligation of selecting the pension fund of a specific category ensues.
Within the term of six months from the day of establishing their mandatory pension insurance, the insured persons are obliged to select a pension fund of a specific category.
Until the day of selection of the pension fund of a specific category, the assets of the insured person are deposited to the temporary account.
 
3.        What is with the insured persons between the age of 40 and 50?
The persons between the age of 40 and 50 that are employed for the first time may, but are not obliged to join the new system of pension insurance. The term for application is six months from employment or payment of the first fee.
 
4.        What is with farmers and craftsmen (self-employed payers of the contributions)?
They are also obliged to select the mandatory pension fund and have all the rights and obligations as the persons permanently employed by an employer. The only difference is that farmers and craftsmen pay the contributions themselves, while that is done by the employer for other persons. The payment slips are sent to self-employed payers by REGOS.
 
5.        What if the insured person does not select the fund in the prescribed term?
If the insured person does not select the pension fund within the term of six months from establishing of the mandatory pension insurance, the Central Registry of Insured Persons will assign him ex officio to the B category pension fund of one of the four pension companies that manage the mandatory pension funds.
 
 
 
 
 
A-B-C
 
1.        On the basis of which the insured person decides to select the category of the pension fund?
Categories of the mandatory pension funds can be A, B or C and they mutually differ by the limitations of the membership with respect to the period of the day of retirement (reference date) and by the investment strategy and the limitations of investment. The insured persons to which 10 or more years has remained until the reference day can be members of the A category pension fund, while the insured persons which have 5 or more years until the reference day can be members of the  B category pension fund. All the insured persons can be members of the C category pension fund.
That means that, in case that a member of the fund has less than 5 years until the day of fulfillment of the age conditions for acquiring the right to the old age pension according to the Pension Insurance Act, according to the Mandatory Pension Funds Act, the member will be assigned to the C category fund. In case that 5 do 10 years has remained to a member of the fund until the day of fulfillment of the age conditions for acquiring the right to the old age pension according to the Pension Insurance Act, the member may decide about the change of the fund category from B to C, but he does not have a possibility of switching to the A category. In case that a member of the fund has more than 10 years until the day of fulfillment of the age conditions for acquiring the right to the old age pension according to the Pension Insurance Act, the member may decide about the change of the fund category from B to A or C.
 
The investment strategy and limitations of the investments differ by categories so that the A category fund belongs to the category of funds with greater risk level according to the expected investment strategy arising from the legal limitations of the investment, and it is expected to have higher yields in the long run and is suitable to younger insured persons. The B mandatory pension fund has the risk level profile and the expected yields similar to the current mandatory pension funds, while, by the legal regulations and the expected profile of the risk level, the C category fund is the least risky, but its expected yields will be lower, it is suitable for the oldest members of pension funds – those to be retired soon.
 
2.        What if the insured person does not select the category of the pension fund alone?
If the insured person does not select the category of the pension fund, the same will be assigned to the B category pension fund.
 
3.        When is it possible to change the categories of the mandatory pension fund?
After the transitional period, i.e. after 8 August, 2014, a member of the pension fund will be able to change the category of the pension fund once in three years, specifically, in the year when the fund member reaches the age that is divisible by three (e.g. u 18, 21, 24, 27, and all until the age of 54), and that must be during the month in which the fund member was born.
 

STATE INSTITUTIONS AND DEPOSYTORY
 
1.        What is the role of the Central Registry of Insured Persons (REGOS)?
REGOS is the government institution the basic task of which is collecting the contributions for members of the mandatory pension funds and keeping of records on the number and balance of personal pension accounts in particular mandatory funds.
Counters of REGOS the only place where the mandatory pension fund can be selected, and they are found in all the branch offices of the Financial Agency (FINA). You can find the list of branch offices here.
 
2.        What is the role of the Croatian Financial Services Supervisory Agency (HANFA)?
 
The Croatian Financial Services Supervisory Agency (HANFA) is the supervisory authority with the supervision of financial markets, financial services and legal and physical persons providing those services include in its scope of activities.
HANFA carries out the supervision of the operation of stock exchanges and controlled public markets, investment companies and issuers of securities, brokers and investment advisers, bound representatives, the Central Clearing and Depository Company, insurance and reinsurance companies, insurance and reinsurance representatives and mediators, investment and pension funds management companies, pension insurance companies, investment and pension funds, the Central Registry of Insured Persons, Fund for Croatian Homeland War Veterans and Members of Their Families, the Pension Fund and legal persons engaged in leasing and factoring operations, unless they are performed by the banks within their registered activities.
HANFA was established in 2005 by merging of three existing supervisory institutions: the Commission for Securities, of the Agency for Supervision of Pension Funds and Insurances, and the Directorate for Supervision of Insurance Companies.
HANFA is an independent legal person with public authorizations within its scope of activities and competences prescribed by the Act on the Croatian Financial Services Supervisory Agency and other laws. It responds to the Croatian Parliament. You can see more on HANFA at www.hanfa.hr.
 
3.        What is the role of a depository?
A depository is the credit institution to which the pension company entrusted the assets of the pension fund on the basis of the concluded contract, for storage and keeping on a special account. The depository may be a credit institution which has the approval by the competent authority to carry out the tasks of storing and administering the financial instruments for the account of a pension company. The depository must be ready and capable of fulfilling all the organizational requirements and conditions necessary for fulfillment of the depository duties according to the provisions of the laws that stipulate the operation of the pension company. No economic operator may participate both, as the pension company, and as the depository, each pension fund may have only one depository, the tasks of the depository of all the categories of pension funds managed by the company must be entrusted to the same depository. During performing of the depository tasks for several pension funds, the assets, the activity and the records of each pension company must be completely separated, both mutually, and from the depository itself. The depository must act exclusively in the interest of the members of the pension funds for which it performs the depository operations, and it is obliged to keep the data made available to it as a business secret.
 
4.        What credit institution has the role of the depository of the Raiffeisen pension fund?
The depository bank of the Raiffeisen pension funds is Addiko Bank d.d. 

PERSONAL PENSION ACCOUNT AND VALUE OF ACCOUNTING UNIT
 
1.        What is a personal pension account?
That is an individual account of the insured person/of the fund member which is opened in the selected pension fund, on which his personal retirement savings are collected and capitalized (paid contributions increased by the realized yield). Checking the balance of the personal account in the mandatory pension fund gives each insured person the possibility of controlling whether the employer pays the pension contributions regularly how much are the saved assets capitalized (increased) annually.
 
2.        How can I find the balance of my account in the mandatory pension fund?
A member of the Raiffeisen mandatory pension fund can learn about the balance of his personal pension account:
·           By calling the toll free telephone 0800 0900 - during the contact with the operator, you should know the number of your pension account and the password (PIN);
·           By the Internet – to check your personal account, you should know the number of your pension account and the password (PIN);
·           By the automatic SMS message, you will receive notifications for every payment to your personal account. You will receive the SMS message about the newly arisen change to the display of your mobile telephone. In order that you could use this option, it is important that you gave the correct number of your mobile telephone in the questionnaire that we sent you after you joined the membership, and that you have opted for this way of notification;
·           You can get a notification by an SMS message at request at any moment when you wish. It is sufficient to send an SMS message to the telephone number 098/404055 or 098/406806. In the content of the message, it should be written, without spaces: the number of your personal account-password, and the SMS reply will arrive in the term of only several seconds. It is important that the message is sent from your mobile telephone because SMS requests sent from other mobile devices will not be acknowledged;
 
Besides, the Central Registry of Insured Persons will make available to every member of the  mandatory pension fund, at least once a year, free of charge, a certificate which contains the number of the accounting units on the personal account, the value of the assets that are on the personal account, the category of the pension fund in which those assets are invested, the pension company which manages that pension fund, the dates of payment and the amounts of the contributions which the member of the pension fund had in the corresponding period, the information on eventual transfer to a pension fund of another category in the previous report period, and the possibilities of transfer to a pension fund of another category in the next year.
 
3.        What is the accounting unit?
Personal pension accounts are kept in the accounting units. Every accounting unit represents a proportional share in the net value of the assets of the pension fund. The sum of the value of all the accounting units, on the accounts of all the fund members, makes the total value of the fund assets.
By the value of the accounting unit on the specific day, you can easily calculate how much assets you have on the account. You should multiply the number of the accounting units on the personal account with the daily value of the accounting unit in kuna and you get the amount on your account.

4.       Why does the balance on my pension account and the value of the accounting unit change/increase/reduce daily?
Personal pension accounts are kept in the accounting units. That is the value of one share in the total net assets of the pension fund. The sum of the value of all the accounting units, on the accounts of all the fund members, makes the total value of the fund assets.
The value of the accounting unit changes daily because the fund invested assets in certain securities (e.g. bonds, shares) and other assets the value of which changes daily in the domestic and world markets. In accordance with the mentioned, the value of the total net fund assets, i.e. the value of the accounting unit also changes daily. For the same reason, the value of the balance on the personal pension account of a member changes as well. See more about investments in the funds at link na mandatory pension funds.

PAYMENTS/DISBURSEMENTS OF CONTRIBUTIONS
1.        Who pays the contributions to my personal pension account in the mandatory pension fund?
The employer is obliged to pay the pension contributions for his employees each month, except in case of the so-called self-employed payers of the contributions (such as craftsmen, farmers, etc.) which pay the pension contributions themselves.
 
2.        Does the employer have to know which mandatory pension fund I selected?
No, your employer will not know in which fund you are registered, nor is he entitled to that. He will pay your total pension contributions to the account of REGOS, which will distribute 15 percent to the account of the state treasury, and the remaining pet percent to the account of the fund you are a member. According to the applicable laws, the employer must not influence the selection of the mandatory pension fund of his employees in any way.
 
3.        What happens if the employer does not pay the prescribed pension contributions?
If there are no payments of the contributions for an insured person, there is no inflow of the assets to his personal account in the fund either, which can be easily checked by calling the fund or the info telephone of REGOS. The insured persons may have a permanent insight in the balance of their accounts in the fund, and thus also in the payments by the employer.
 
4.       What happens if the person is on sick leave for a longer time?
In case that the sick leave lasts for longer than 42 days, payment of all the pension contributions is taken over by the Croatian Health Insurance Fund (HZZO).
 
5.        Can a fund member or anybody else withdraw the money from the account?
A fund member may not withdraw the assets from the personal account although those assets are his personal and permanent ownership. The saved assets can be used exclusively for payment of the pensions, specifically, only at the moment when the time comes for that, i.e. when the legal preconditions have been satisfied. The pension from Pillar II. and III. is paid by the pension insurance company. For the moment, there is only one pension insurance company in Croatia – The Raiffeisen Pension Insurance Company. For more on Pillar II. and III., check: link na the pensions from the II. and Pillar III.


The assets on the personal pension account are legally protected from execution, bankruptcy or liquidation and they do not enter the bankruptcy estate of the insured persons or of the depository bank and nobody can withdraw them except the member himself upon fulfillment of the conditions.
 
6.        I lost the job, what will happen with my money in the fund? What do I have to do?
If you lost the job, the money stays in the personal pension account until another employment without being duly capitalized, i.e. increased. If a person remains unemployed until the pension, all the payments until then, increased by the yield which was added for all those years, will, at the moment of retirement, be transferred to the selected pension insurance company which pays the pension.
When you become employed again, the contributions will continue to be paid in the formerly selected mandatory pension fund.
 
7.       What happens in case of death of a member of the fund? When and how can the assets be inherited?
In case of death of a member of the fund, we kindly ask you to advise the pension company that manages the fund about the arisen case.
We point out that any disposing with the assets saved in the mandatory pension fund is connected with the realization of the right from the first pension Pillar (HZMO).
You can inherit the money only and exclusively in case of death of a member of the fund if it occurred before the beginning of using of pension, with fulfillment of the anticipated legal conditions. You can see more on inheriting the assets from Pillar II. here: link na for members/ members mandatory funds/inheriting the assets

ACCELERATED RETIREMENT PLAN, EARLY RETIREMENTS AND DISABILITY PENSIONS
 
1.        What happens with the pension contributions for the persons with the accelerated retirement plan?
A member of the pension fund whose rights from the pension insurance are stipulated by a special regulation which determines the rights from pension insurance of active military personnel, police officers and authorized official persons, or his pension is determined according to that regulation, could give a statement that he wished to stay a member of the pension fund to the Central Registry of Insured Persons until 20 March, 2014. If he did not do that, the Central Registry of Insured Persons transferred the whole capitalized assets from the personal account of a member of the pension fund to the state budget, and the Croatian Pension Insurance Institute will determine the pension to the former member of the pension fund after the rights to the pension have been acquired, as if he was insured only in the mandatory pension insurance on the basis of generation solidarity.
 
For other persons with the accelerated retirement plan, no legal resolution has been passed so far, and, upon acquiring the conditions pension, their assets will be transferred to the state budget, for the purpose of payment of the pension through HZMO.
Only in case of death of a member, assets from the mandatory pension insurance belong to the inheritors, if there are no beneficiaries of the family pension.
 
2.        What happens with the assets in the fund if a person goes into the disability pension?
If a complete loss of the working ability arises in a member of the pension fund with the right to the disability pension according to the Pension Insurance Act, the pension company will transfer the total capitalized the assets on the personal account of the member of the pension fund to the state budget through the Central Registry of Insured Persons, and the Croatian Pension Insurance Institute will determine the disability pension to him according to the Pension Insurance Act, as if the  fund member was insured only in the mandatory pension insurance  on the basis of generation solidarity.
 
For a member of the pension fund which is older than 55 and which is a member of the pension fund for more than 10 years, if the monthly amount of the disability pension to which he would be entitled according to the program of the pension insurance company, increased by the amount of the basic disability pension, would be higher than the monthly amounts of the disability pension, according to the Pension Insurance Act, the assets from the account of the member of the pension fund will be transferred through the Central Registry of Insured Persons to the pension insurance company which he selects and which insures to him the disability pension according to its program, in accordance with the special act.
 

FEES
 
1.       What exit fee is charged during the change of the fund?
Exit fee is charged in case when the insured person decides to change the mandatory pension fund, and if at least three years have passed since the first selection. The exit fee, as well as all the other fees, is charged by all the mandatory pension funds.
According to the legal regulations, the exit fee amount to:
·           in the first year of membership 0.8%
·           in the second year of membership 0.4%
·           in the third of membership 0.2%
After three years of membership, the exit fee is not charged.
 
2.       How can I change the fund free of charge?
After three years of membership in the fund, you can change the selected fund for free. Until then, the exit fee is charged. 
 
3.       What entrance fee is charged?
Entrance fee of the Raiffeisen mandatory pension funds amounts to 0.8% of the paid contribution.

4.      What is management fee?
For the purpose of managing the assets of the fund, the pension company charges a certain management fee to the pension fund. The Act prescribes the highest fee of 1.2% annually on the assets of the fund, and for each further year, the highest percentage of the management fee is prescribed by HANFA, but not above 1.2 %. According to the HANFA's decision, the management fee for 2014 amounts to 0.45% annually from the total assets of the fund.
 
5.    What depository fee is charged?
Depository fee is paid to the depository bank, that is Addiko Bank, Slavonska avenija 6, and according to the Depository Contract, depository fee amounts to 0,024% annually from the total assets of the fund.
 
FUND INVESTMENTS AND SAFETY OF ASSETS IN FUND
1.        What does the pension company do with my money?
The pension company invests assets of the pension fund with the goal of increasing the value of the assets of the pension fund in order to ensure payment of the pension payments to the pension fund members.
Assets of the pension fund are invested according to the investment policy, in accordance with the legal provisions. The Mandatory Pension Funds Act stipulates very clearly and concretely how the pension funds can be invested, as well as the structure according to the type of the assets, states and regions, foreign currencies, economic sectors and other. You can check on the structure of the investments of each Raiffeisen pension fund at link na: mandatory retirement savings.

2.       What is the yield of the fund?
The yield of the fund is a percentage of the change of the value of the accounting unit during the specified period, e.g. one year. Simply said, that is a percentage earning that was realized by the pension fund, i.e. the profit that was realized by the pension company on the totally paid assets of all the fund members, during a specific period of time.
The yield depends on the developments in the market value of the assets of the pension fund (e.g. prices of bonds, shares and other securities, and of the assets in the fund portfolio), i.e. on the investment policy of the pension company that manages the pension fund.
 
3.        What is the reference yield, and what is the guaranteed yield? What safety does the escrow deposit give me as a fund member?
Each member of the pension fund is guaranteed the yield in the amount of the reference yield of the corresponding category of pension funds reduced in by twelve percentage points in the A category pension fund, six percentage points in the  B category pension fund and three percentage points in the C category pension fund.
The rate of reference  of the pension funds yield is calculated for the previous calendar year for each category of pension funds as the pondered arithmetic mean of the rates of the average annual yields of all the pension funds of the same category for the period of the previous three calendar years, where the pondered value is the share of  the net value of the assets of a particular pension fund in the total net value of the assets of all  the pension funds of the same category on the last working day in the calendar year.
If the average annual yield of the pension fund through the period of three calendar years is smaller than the guaranteed yield, the pension company will pay the difference to the pension fund until the guaranteed yield from the escrow deposit, and, if that is not enough, from the capital stock of the pension company up to 50 % of the capital stock of the pension company at the most.
The calculation of the guaranteed (yield) is carried out in January each year for the previous calendar year.

PAYMENT OF PENSION
 
1.        What are the basic steps to achieve the pension rights from II. Pillar?
Here are four basic steps to achieve the pension rights from II. Pillar of pension insurance:
·           Croatian Pension Insurance Institute (HZMO) issues the future pension beneficiary the Arrangement of pension rights admission, and for the II. Pillar members it submits data from the Arrangement to REGOS.
·           The insured person chooses Pension Fund Management Company that will pay out his II. Pillar pension and, after regulated procedure, REGOS issues an order to transfer assets from the individual account of II. Pillar fund member (future pension beneficiary) to the account of chosen Pension Fund Management Company.
·           The Company concludes a Pension contract with the insured person after REGOS submits information about total amount of capitalized contributions at individual account on a day of closure of individual account.
·           From allocated funds, reduced for a regulatory fee, pension insurance company, in accordance to concluded Contract, pays out retiree a monthly life II. Pillar pension.
 
2.        What types of pensions are possible to choose from the Pillar II. ? Which parameters influence the amount of the pension?
Pensions from the Pillar II., offered by the Raiffeisen pension insurance company are as follows:
·           Lifetime annuity                                                                                                                 
·           Joint-life last-survivor annuity                                                                                                          
·           Lifetime annuity with guaranteed period                                                                                                       
·           Joint-life annuity with guaranteed period        
 
The amount of the pension from Pillar II. depends on:
·           The type of the pension you select
·           The amount of the funds on the personal account of a member of the mandatory pension fund which are transferred to the pension insurance company for the purpose of payment of the pension
·                      Your age


If a complete loss of the working ability arises in a member of the pension fund with the right to the disability pension according to the Pension Insurance Act, the pension company will transfer the total capitalized the assets on the personal account of the member of the pension fund to the state budget through the Central Registry of Insured Persons, and the Croatian Pension Insurance Institute will determine the disability pension to him according to the Pension Insurance Act, as if the  fund member was insured only in the mandatory pension insurance  on the basis of generation solidarity.
 
For a member of the pension fund which is older than 55 and which is a member of the pension fund for more than 10 years, if the monthly amount of the disability pension to which he would be entitled according to the program of the pension insurance company, increased by the amount of the basic disability pension, would be higher than the monthly amounts of the disability pension, according to the Pension Insurance Act, the assets from the account of the member of the pension fund will be transferred through the Central Registry of Insured Persons to the pension insurance company which he selects and which insures to him the disability pension according to its program, in accordance with the special act.