Voluntary Pension Insurance Schemes

Voluntary insurance

• All persons can participate voluntarily in the schemes without restriction.
• Persons covered by employee plans or collective insurance agreements.

General finances

• Fully funded scheme with individual retirement accounts financed by contributions and capital revenues (investment returns).

Contribution payments

• Individual insurance: natural persons or another natural or legal person on behalf of a natural person can provide contribution payments and decide upon the respective amount individually.
• Collective insurance: contribution payments paid by employer/plan organiser and/or employee (proportions vary), in accordance with the membership agreement between the individual of the voluntary pension fund and the management company.

State support & incentivising strategies

• Employers’ contributions of up to RSD 6,062 per employee are exempted from payroll taxes and contributions for compulsory social insurance.
• Individual contributions of up to RSD 6,062 are exempted from payroll tax (10%).

• Pension plan providers manage the pension funds and pay benefits directly to the person. The Law on Voluntary Pension Funds and Pension Plans specifically regulates the activities of management companies (closed joint stock companies) that may be established by domestic and foreign natural and legal persons.
• The ‘National Bank of the Republic of Serbia’ regulates licenses, supervises business operations and investments, and sanctions pension plan providers.
• Participation in a voluntary pension fund is based on a membership agreement, enabling the management company to invest funds collected on the basis of a pension contribution on behalf of the fund member.

• Minimum age is 58; the maximum age for a payout of funds accumulated in the individual account is 70.

Pension payments

• Accumulated capital through contribution payments and investment yields, minus administrative costs/fees of pension plan provider.
• Funds can be withdrawn in several ways: one-time (lump sum) payment, programmed payment (life time annuity), purchase of annuities or on the basis of a combination of the above methods. In the case of a lump sum payment, a maximum of 30% of the accumulated funds can be withdrawn at a single time.

Taxation and social security contributions

• Pension payments are subject to income tax according to general tax rules.
• Pension payments are not subject to social security contributions.