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How Is Your Pension Determined?

How Is Your Pension Determined?

How Is Your Pension Determined?

The pension amount is calculated by multiplying the personal points by the pension factor and the current value of the pension. The amount of the pension includes the pension supplement as its integral part. The pension supplement is determined in the manner and under the conditions prescribed by the Pension Supplement Act as an addition to the pensions granted according to the Pension Insurance Act. The pension supplement will be awarded for all pension entitlements acquired from 1999 to 2010, in the range from 4% to 27%. From 1 January 2010, the pension supplement is granted in the amount of 27%. As of 1 January 2012, the supplement represents an integral part of the pension.

Personal Points
Personal points depend on the completed qualifying period and salaries an insured person earned during his/her working life. They are determined by multiplying the average value points by the total qualifying periods and the initial factor. They are calculated equally for all types of pensions.
Value Points
Value points are calculated by dividing the salary i.e. the contribution base by the average salary of all employees in the Republic of Croatia for the same calendar year. The calculation takes into account salaries from 1970 to the year preceding the year of entitlement.
The salary earned in the year of pension entitlement is not taken into account for determining the value points. Therefore, if the day of acquisition of the right to a pension is 31 December or some earlier date in that year, the salary earned for that year as well as the severance payment will not be taken into account for the calculation of the pension amount.
Average Value Points
Average value points are calculated as an average of the value points in the accounting period.
Initial Factor
  • The value of the initial factor for disability pension, temporary disability pension, old age pension, early age pension due to bankruptcy and old age pension for a long-term insured person is 1.0.
  • The initial factor for the early age pension is determined by reducing the initial factor (1.0) by 0.2% for each month of the retirement until the person reaches the age legally prescribed for the old age pension. The initial factor depends on the number of months of anticipated retirement, compared to the age-eligibility prescribed for the old age pension. The reduction of the initial factor is permanent and does not depend on the length of the qualifying period
  • The initial factor for the calculation of the old age pension is increased by 0.34% for persons retiring for the first time after reaching 65 years of age and 35 years of the qualifying period, for each month after reaching the age prescribed for the eligibility to the old age pension, but not longer than five years. 
In the period from 1 January 2020 to 31 December 2029, the amount of pension received by an insured woman acquiring her pension right for the first time and having at least 35 years of the qualifying period will be increased per 0.34% for each month elapsed from her eligibility to the old age pension in the transitional period (Article 180 of the ZOMO) to the the day of her actual retirement, but not longer than for five years.  
An old age pension granted to a long-term insuree is not increased per 0.34% for each month after 60 years of life up to the day of such person's pension entitlement. The initial factor is here 1.0.
Pension Factor
The pension factor determines the extent to which personal points are taken into account when calculating the pension.

a) The pension factor 1.0 applies for old age, old age pension for long-term insures, early age and disability pensions due to complete loss of work capacity.  

b) The pension factor 0.8 applies for a temporary disability pension paid during unemployment  

c) The pension factor applies for disability pension due to a partial loss of work capacity is:
  • 0.8 if paid during unemployment
  • 0.5 if paid during employment, i.e. self-employment
  • 0.6667 if caused by an injury at work or occupational disease and paid during employment or self-employment of the insured person
d) The pension factor for the survivor's pension depends on the number of family members. It ranges from 0.7 (for one member) to 1.0 (for four or more family members).  

e) The pension factor 1.0 applies for the early age pension paid during employment up to half of full-time work.  

f) The pension factor 1.0 applies for the calculation of an old age pension granted according to special regulations on the rights of active military personnel, police officers and authorized officials or according to the rules on the pension rights of deminers if received during employment up to half of the full-time working hours. If such a pension is paid along with the full-time working hours, the pension factor is 0.5.  

Minimum Pension
The minimum pension is determined by virtue of the office, for the beneficiaries retired according to ZOMO only, provided their pensions acquired based on the completed qualifying period and earned salaries fall back the minimum pension level.
The minimum pension counts for each year of the qualifying period in the amount of 100% of the actual pension value applicable on the day of the pension entitlement. The minimum pension amount is calculated by multiplication by the initial factor and the pension factor.
As of 1 July 2022, the value of the minimum pension for one year of the qualifying period is HRK 77.65 kn (10.31 EUR).
Maximum Pension
According to the Maximum Pension Act, the highest pension is the amount received by multiplying a decimally expressed total qualifying period completed by an insured person by 3.8 value points and by the initial factor. Thus counted personal points are multiplied by the pension factor and the actual pension value. If the amount of the pension, calculated under the provisions of the ZOMO, exceeds the amount determined under the mentioned Act, the amount of the maximum benefit will apply.
The maximum pension for the Homeland War veterans and members of the Croatian Parliament is determined in the amount of a double maximum pension benefit determined for 40 years of the qualifying period. For the Members of Parliament who held parliamentary office in sixth or an earlier convocation of the Croatian Parliament, pensions are limited according to the Act on Amendments to the Maximum Pension Act. To the representatives of the seventh convocation of the Croatian Parliament, who hold parliamentary office in the first term, the provisions of the ZOMO fully apply, and the limit is 3.8 value points.

Pension Adjustment
The actual pension value (APV) is the amount of pension determined per one personal point. The APV that applies each calendar year from 1 January and 1 July is calculated by aggregating the inflation rate of the consumer price in the last six-month period compared to the immediately preceding six-month period, and the rate of the change of an average gross salary all employees in the Republic of Croatia earned in the previous six-month period, compared to an immediately preceding six month period.
APV is determined by the Steering Committe of HZMO, based on the information published by the Croatian Bureau of Statistics, two months after the elapse of each six-month period at latest.

Additionally Credited Periods
For a parent - mother or adoptive mother who acquires her pension right, the total qualifying period is calculated by crediting of an additional six-month period to the actual qualifying period, for each child born or adopted (not for eligibility, but to determine the pension amount). 
For a parent – mother or adoptive mother entitled to a basic pension from the mandatory pension insurance of generational solidarity, a six-month period is credited for each child born or adopted. Such six-month period is credited to the part of the pension acquired under the qualifying period completed before or after the introduction of the mandatory pension insurance based on capitalized savings, depending on the period in which the predominant qualifying period was completed.
Exceptionally, if instead of the mother or adoptive mother the father of the child or adoptive father uses the additional post-natal leave according to the regulations on maternity and parental benefits, he will be credited an additional six-month period when exercising his pension right, provided the father was a parent who used the predominant part of the additional post-natal leave.
A parent will not be entitled to such additional qualifying period if his/her right to parental care was terminated.
The provisions on the additionally credited period shall also apply to a family member of the insured person who, after entactment of ZOMO, becomes entitled to the survivor's pension after the death of the insuree.

Pension Supplement

 Persons entitled to pension supplement:
  • Pension beneficiaries whose pension has been granted and determined according to ZOMO (Articles 74 to 81 and 184 of ZOMO)
  • Beneficiaries of pensions acquired by the application of international social security agreements under which the pension from the Croatian pension insurance is granted and determined exclusively according to ZOMO
  • Regular members of the Croatian Academy of Sciences and Arts (HAZU) who acquired their pension right after 26 December 2002 and whose pension right was recognized and determined according to ZOMO, provided such pension falls behind the maximum pension level.

Persons also entitled to pension supplement from 1 January 2019:
  • Beneficiaries of old age and early age pensions for whom a basic pension has been determined from the mandatory pension insurance of generational solidarity
  • Beneficiaries of the basic disability pension
  • Family members of an insured person who is also covered by the mandatory pension insurance of individual capitalized savings and who receives the survovor's pension in the amount of the basic pension
  • Current pension beneficiaries whose basic pension entitlement was granted under the mandatory pension insurance of generational solidarity, in the period from 1 January 2014 to 31 December 2018.
For the beneficiaries entitled to pension in the period from 1 January 2014 to 31 December 2018, HZMO will determine their pension supplement by virtue of its office, without issuing a decision.
For the beneficiaries of pension according to Article 91, paragraphs 1 and 2 of ZOMO, the supplement that is credited to the part of the pension acquired from the beginning of insurance based on the individual capitalized savings (i.e. from 1 January 2002) until the day of their retirement, will be established in the amount of 27 % and multiplied by the basic pension factor applicable for the calendar year in which the insured person became entitled to the pension. 

The following persons are not entitled to the pension supplement:
  • Beneficiaries of the survivor's pension granted after 1 January 1999 after the death of the pension beneficiary retired under the regulation on the pension and disability insurance in force until 31 December 1998
  • Beneficiaries of the maximum pension
  • Beneficiaries of the minimum pension
  • Beneficiaries of pensions earned and/or determined based on special regulations, under more favorable conditions than the conditions determined according to ZOMO.
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