Peštek: FZPIO Report Reveals Chaos in Pension System Finances

(Patria) - A report on the work of the Pension and Disability Insurance Fund of the Federation of Bosnia and Herzegovina for 2024 has been submitted to the delegates of the House of Peoples of the Parliament of the Federation of BiH, where numerous problems and inconsistencies can be observed, states delegate (SBiH) in the House of Peoples of the FBiH Parliament Enes Peštek.

“I am obliged to warn the public about serious shortcomings in the work of the Pension and Disability Insurance Fund of the Federation of BiH (FZPIO), which are clearly visible in the latest report of the Supervisory Board. The report acknowledges that due to the lack of harmonization between the laws regulating pension insurance and the laws on the budget and treasury operations, the General Ledger of the budget does not provide a complete picture of the Fund's revenues. As a result, the financial reports show a "deficit of expenditures over revenues" of as much as 532 million KM, although these funds actually exist but are not recorded. Revenues of over 456 million KM based on legal provisions, as well as certain refunds and receipts, are not recorded, which leads to a false picture of a deficit. This is a recurring problem, present in reports from 2020 to 2023, indicating systemic negligence or deliberate concealment,” Peštek pointed out.

Dependence on ad hoc Government redistributions

He adds that the Fund operated during 2024 only thanks to urgent redistributions from the budget, including over 37 million KM allocated at the beginning of 2025 for pension payments.

“This clearly shows that the pension insurance system does not have stable and sustainable foundations. With amendments to the contributions law, the Fund lost its status as an independent holder of its own revenues. Contributions became revenue for the general budget, meaning that pensions are no longer directly linked to the payments of insured persons, but depend on political will and budget redistributions. This undermines the security of the pension system,” warns Peštek.

He states that pension costs in 2024 increased by over 356 million KM compared to the previous year, and the number of pensioners increased by 2.57%.

“Instead of strategic reform, PIO-MIO resorts to one-off assistance and "patching holes". The report shows that the Fund formally fulfills its obligations to pensioners, but it does so through non-transparent financial constructions, temporary budget transfers, and concealment of the actual situation. This is not a sustainable system, but a dangerous practice that endangers future generations of pensioners. I call on the Government of the Federation of BiH to urgently initiate a reform of the pension system, introduce transparent accounting, and ensure revenue stability, because otherwise, our pension fund is heading into debt slavery from which there is no return,” said Peštek.