What are the changes in the pension system?

The employer pays 18% of each employee's wage to the Public Revenue Office as contribution for pension and disability insurance, which is transferred to the Pension and Disability Insurance Fund of Macedonia – PDIF. This is valid for employees that have remained in the first pillar and for those who are members of the first and the second pillar. For the second pillar members the total contribution for pension and disability insurance is divided into two parts: 65% of the contribution remains in the PDIF and 35% is transferred to an individual account in a private pension fund.

The contribution paid to individual accounts is accumulated and invested until the retirement of the member.

Who can join two-pillar system?

Persons who have made at least one contribution to the mono-pillar system had the option to either remain in the mono-pillar system or switch to the new two-pillar system. This option expired on December 31, 2005. Persons who are employed for the first time after January 1, 2003 are mandatory members of the second pillar and they have the right to choose in which of the private pension funds they will be members.

For those employees who remain in the mono pillar pension system, the pension and disability insurance is covered solely by the PDIF, and there will be no changes in how they earn a pension. Those who join the two-pillar pension system will receive a combined pension, from the PDIF and from the accumulated assets on the individual account with the private pension fund. The PDIF will continue to cover disability, survivors, and the minimum guaranteed pension for all employees.