FBiH Government adopts amendments to the Pension Law: Pensions to grow by a total of 17.2 percent in 2026

(pATRIA) - The Government of the Federation of BiH, at today's session in Sarajevo, upon the proposal of the Federal Ministry of Labour and Social Policy, adopted the Bill on Amendments and Supplements to the Law on Pension and Disability Insurance and sent it to the parliamentary procedure under an abbreviated procedure.

As the proposer explained, the amendments and supplements to the Law encompass all pension beneficiaries in the Federation of Bosnia and Herzegovina, all types of pensions, and all categories of pensioners, from the lowest to the highest pension, in accordance with the Constitution of the Federation of BiH and the principle of non-discrimination, as the right to a pension is an earned right.

The most significant change relates to a new, fairer model for pension harmonization, which combines the growth of average wages and the growth of consumer price indices in a 60/40 or 40/60 ratio, depending on which option is more favorable for pensioners at a given moment, thus linking pensions to real economic indicators and ensuring a more stable and secure increase in income.

In its amendments, the law introduces semi-annual pension harmonization, which will be carried out twice a year, on January 1 and July 1, starting from January 1, 2026. It is estimated that the total pension increase in 2026 will be around 17.2 percent, with the January harmonization amounting to approximately 11.6 percent, while the June harmonization will add an additional 5.6 percent.

The proposed amendments further expand the right to funeral expense compensation, which will no longer be limited only to immediate family members but will belong to any person who has actually borne these costs, while the amount of compensation is defined as the average paid pension in the previous month.

All financial obligations arising from the new harmonization model have already been planned in the Budget of the Federation of BiH, and after the Pension and Disability Insurance Fund transitions to the treasury model of operation, pension payments are made directly from the budget of the Federation of BiH, which further ensures the stability and security of the pension system. Specifically, for the amendments to the Law, the Government had to secure an additional one billion and one hundred million KM in the budget, and the total amount planned for pension payments in 2026 is around four and a half billion KM.

By adopting the amendments and supplements to this law, the Government of the Federation of Bosnia and Herzegovina has shown clear social sensitivity and confirmed that it is taking responsibility and the obligation to continuously work on improving the material situation of pensioners, together with pensioner representatives. This law is precisely proof that the Government stands behind its promises and publicly stated commitments with its actions.

This law enters into force on the eighth day from the date of its publication in the Official Gazette of the Federation of BiH, and will be applied from January 1, 2026.