Beginning of redemption of the public debt to pensioners

Mr. Bozidar Djelic, Serbian Minister of Finance and Economy declared today that the Serbian Government would start redeeming the last big unsettled public debt to pensioners with the upcoming pension payment on December 24 – the debt totaling approximately 20 billion dinars, incurred some eight years ago.

The Government of the Republic of Serbia adopted today the Decree on the process and dynamics of the debt redemption, comprehending unpaid pensions, and financial compensation for aid and care. This debt was contracted in 1994 and 1995, and the Republic Fund for Pension and Disability Insurance of employed people will carry out its payment. The Serbian Minister of Social Affairs, Ms. Gordana Matkovic, declared that the debt would be reevaluated according to the pensions rise index, and that the lowest debt amounts would be paid as soon as possible.

The settlement of the public debt will go on until June 2006, and will be paid monthly through additional 350 dinars with every first half of the monthly pension. “This kind of payment dynamics has been agreed with representatives of pensioner associations, who expressed their satisfaction seeing that the debt will be paid in cash, through regular monthly installments”, declared Mr. Djelic.

The right to this settlement will be granted to some 694 thousand pensioners, and some other 257 thousand of their successors, but only upon submission of a completed request form. In the current of the following year, some 3.5 to 5 billion dinars will allocated for these services, depending on the number of successors declared. “This represents the proof of our country’s solidarity towards elderly citizens, having in mind that this debt will not be serviced from donations funds, but from the budgetary fiscal resources”, declared Minister Djelic.

This is the first time in the past ten years that pensions in Serbia are paid regularly, and to preserve this regular dynamics now reached, more than 40 percent of necessary budgetary funds, i.e. approximately 47 billion dinars, are allocated. The average pension amount in Serbia in January 2001 was 2,300 dinars, while today it is 6,500 dinars.

Changes to the pensions system are also to be expected – the reforms will be based on experiences of other transition countries, and they are necessary primarily because of the accelerated maturing of the population, constant deficit of pension funds, and more than liberal conditions to become a pension beneficiary up until now. The final objective of the reform process is to establish a sustainable financing capacity rise, providing regular payment of pensions.