Pension System in Serbia
The Serbian pension system is based on the mandatory pay-as-you-go (Pillar I) and the voluntary funded system (Pillar II – voluntary). The Pension and Disability Insurance Act (Official Gazette RS 34/03) governs the system administered by the Pension and Disability Insurance Fund (PIO Fund).
Pillar I – Mandatory pension insurance in Serbia
The total PIO contribution in Serbia is 26% of gross salary: 14% paid by the employee and 12% by the employer. The old-age pension is earned upon reaching 65 years of age with a minimum of 15 years of insurance. The pension amount is calculated using a points system: each year of insurance earns a number of points depending on the salary level. The value of the pension point is set periodically by the Serbian Government.
Pillar II – Voluntary pension insurance
In Serbia, Pillar II of pension insurance is voluntary. Contributions to voluntary pension funds are tax-deductible up to 5% of gross salary. Employers may also contribute on behalf of employees, with the same tax benefits. Withdrawals from voluntary funds are permitted from the age of 58. The National Bank of Serbia (NBS) regulates voluntary pension funds.
Early retirement and special cases
Early retirement in Serbia is possible at age 60 with 35 years of insurance (men) or 58 with 33 years (women, transitional), with a permanent reduction of 0.4% per month short of regular retirement age. Disability pension is granted based on the assessment of the PIO Fund commission. Survivor's pension is available to the spouse and children of the deceased insured person.
Frequently Asked Questions
How does the pension points system work in Serbia?
Each year of insurance earns you a certain number of points depending on the ratio of your annual salary to the average annual salary in Serbia. The total points are multiplied by the value of the pension point set by the Government. Higher salary = more points = higher pension.
What is a voluntary pension fund and who regulates it in Serbia?
A voluntary pension fund (Pillar II) is a fund to which you can voluntarily contribute for retirement. The NBS (National Bank of Serbia) regulates and supervises voluntary pension funds. Contributions are tax-deductible up to the statutory limit.
Is a foreign pension taxable in Serbia?
In principle, yes – income from foreign pensions is subject to income tax in Serbia if you are a Serbian tax resident. International double taxation treaties may affect the tax treatment. Consultation with a tax advisor is recommended.