Delić on the Pension and Disability Insurance Law: Acquired rights are not touched, pensions cannot be reduced by future adjustments

(Patria) - The proposal for amendments to the Law on Pension and Disability Insurance is one of the most important reform-social laws in the current mandate, directly affecting more than 465,000 pensioners in the Federation of BiH, as well as the long-term stability of the pension system.

Federal Minister of Labour and Social Policy Adnan Delić emphasized that the amendments to the Law were not made unilaterally, but in close cooperation with pensioner representatives.

“These amendments were prepared in agreement and at the request of the Federation of BiH Pensioners' Associations Union. Together, we sought solutions that improve the standard of living for pensioners while simultaneously preserving the stability of the system, aware that the pension fund is inextricably linked to the labor market, demographics, and the fiscal capacity of the Federation,” stated the minister.

He recalled that the Parliament of the Federation of BiH held a special thematic discussion in August last year on the state of the pension and disability system, the financial situation of the Pension and Disability Insurance Institute (PIO), and the future trends of the system.

“We opened that discussion publicly and transparently, so that everyone would have a clear insight into the real possibilities of the system. After that, the Parliament adopted a conclusion tasking the Government of the Federation to submit amendments to the PIO Law to the parliamentary procedure. We have complied with that conclusion, and the law has been submitted in the unchanged form in which it was previously presented,” said the minister.

The essence of the proposed amendments is to improve pensioners' income and establish a more stable, predictable, and fair pension system. The most significant change relates to a new pension adjustment model, which combines the growth of consumer prices and the growth of the average salary in a 60:40 ratio or vice versa, always applying the more favorable option for pensioners.

“Acquired rights are not touched. Pensions cannot be reduced by any future adjustments,” emphasized the minister.

According to estimates, the new model will result in a total annual pension increase of around 17 percent in 2026, whereas under the current law, this increase would be around five percent.

The law also introduces semi-annual pension adjustments, and from 2026, pensions will be adjusted twice a year, on January 1st and July 1st, thus avoiding long waits for increases.

Additionally, it provides for the introduction of multiple levels of the lowest pension depending on years of service, capping the highest pensions to reduce large disparities, strengthening protective mechanisms in the system, and extending the right to funeral cost compensation to individuals who actually bore those costs.

The minister also recalled the measures that have already been implemented in this mandate for the benefit of pensioners, including extraordinary and regular pension adjustments, multiple one-time cash payments, increased funds for spa treatment, strengthening of the Pensioners' Associations Union, and the possibility of working while receiving a full old-age pension.

“These solutions are not perfect, but they are realistic, financially sustainable, and significantly better than the existing ones. This is not a law against pensioners, but a law that ensures the long-term security of the pension system and a more dignified life for those who built it,” concluded the minister.