Annual Report ZPIZ 2013

Page 1

2013

Pension and Disability Insurance in Numbers

Pension and Disability Insurance Institute of Slovenia


Prepared and edited by: Janja Burja Cerjanec, Jurij Rici, Sonja Šuštar Translated by: Barica Novak Title: Pension and Disability Insurance in Numbers, 2013 Published by: Pension and Disability Insurance Institute of Slovenia, Kolodvorska 15, Ljubljana Person responsible: Marijan Papež, Director-General Person responsible for the field: Tanja Frank, MSc, Head of Service for Statistics and Analytics Design and print: CreatoorLABS d.o.o., Šenčur Photo: Thinkstock Year of edition: 2014 Number of copies: 90 © Source must be acknowledged when using and publishing data from this document. CIP – Publication catalogue record National and University Library, Ljubljana ISSN: 1854-925X


Dear Readers, This brochure has been prepared by the Pension and Disability Insurance Institute of Slovenia for your information and for the information to all those interested in our field of activity. It presents the activities of the Institute through charts and statistical data.


Table of contents INTRODUCTION 5 01 THE INSURED 6 02 BENEFICIARIES OF PENSIONS 8

- BENEFICIARIES OF PENSIONS FROM COMPULSORY INSURANCE - PENSIONERS 10

- BENEFICIARIES OF DISABILITY INSURANCE BENEFITS 18

- BENEFICIARIES OF ANNUAL ALLOWANCE AND ASSISTANCE AND ATTENDANCE ALLOWANCE

22

- BENEFICIARIES OF DISABILITY ALLOWANCE, LUMP SUM FOR WIDOW-ERS AND BASIC PROVISION FOR WIDOW-ERS

24

- PENSION BENEFICIARIES NOT COVERED BY THE COMPULSORY INSURANCE

26

- BENEFICIARIES OF BENEFITS – FROM ABROAD 28 03 FINANCIAL MANAGEMENT 32 - REVENUE 33 - Tax revenues (Taxes and contributions) 34 - Tax revenues and their share in the Institute´s revenue

35

- Transfer revenues 36 - EXPENDITURE 37 - Pensions 38 - Disability insurance benefits 39 - Transfers towards providing social security 40

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- INSTITUTE’S EXPENDITURE AS A PERCENTAGE OF GROSS DOMESTIC PRODUCT (GDP)

41

0


00

INTRODUCTION

Under the Pension and Disability Insurance Act (ZPIZ, ZPIZ-1 and ZPIZ-2), the Pension and Disability Insurance Institute of Slovenia (hereinafter referred to as the Institute) is the provider and implementer of compulsory pension and disability insurance in Slovenia. It is the second largest public fund, following the national budget. Compulsory pension and disability insurance is financed by the insured and employers through contributions for compulsory pension and disability insurance and from the national budget. With the Institute the insured can claim their entitlements and lodge appeals. These entitlements are pensions,

disability insurance benefits on the basis of remaining work capacity, assistance and attendance allowance and other entitlements not covered by compulsory insurance scheme and regulated by special acts and regulations. Under transitional provisions of ZPIZ-2 the Institute can also award disability allowance for physical impairment due to occupational disease or accident at work and pays disability allowance, lump sum for widow-ers, basic provision for widow-ers to beneficiaries who had been granted these entitlements before ZPIZ-2 took effect.

This brochure provides the following statistical data on pension and disability insurance in Slovenia for 2013:

01

THE INSURED

02

BENEFICIARIES OF PENSIONS

03

FINANCIAL MANAGEMENT


01

The insured

Unlike most compulsory insurance schemes in other countries, the pension and disability insurance scheme in the Republic of Slovenia is uniform for all insured persons. This means that all insured persons are included in the compulsory insurance scheme under the same act and covered by the same insurance provider. The insurance scheme includes all workers - contributors employed with legal entities and with the self-employed; the self-employed own-account workers, the

unemployed receiving unemployment benefits from the Employment Service; insured parents and some other categories of the insured as well as persons included in compulsory insurance on a voluntary basis. In 2013 there were 833,121 insured persons on the average, 77.7 per cent were workers employed with legal entities; 7.4 per cent the selfemployed; 6.1 per cent the employed by the self-employed; 3.5 per

The insured classified by five-year age group and gender, 2013 Age in years

65 + 60-64 55-59 50-54

Women

Men

45-49 40-44 35-39 30-34 25-29 20-24 15-19 80,000

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60,000

40,000

20,000

0

0

20,000

40,000

60,000

80,000


Provisional data on the average pension qualifying period completed by the insured by age and gender, 31 December 2013

cent unemployed persons; 2.4 per cent insured parents; 2.1 per cent voluntarily insured persons; 0.7 per cent farmers and 0.1 per cent other insured persons.

Gender Completed age

Women

Men

Number

Number

Years

Months

Years

Months

15 - 19

0

5

0

7

20 - 24

1

9

2

3

25 - 29

3

8

4

11

30 - 34

7

11

8

8

35 - 39

13

8

13

7

40 - 44

19

10

18

11

45 - 49

25

6

24

6

50 - 54

29

8

28

5

55 - 59, of which:

32

6

32

4

32

1

31

2

56

32

10

32

2

57

32

11

32

10

58

32

5

33

1

59

31

11

32

10

32

1

32

10

60

31

8

32

11

61

32

3

32

6

62

32

7

32

9

63

31

9

33

1

64

32

11

33

5

55

60 - 64, of which:

65+

41

5

40

11

Average total

18

11

18

10

Average 55 and over

33

7

33

4

The age pyramid of the insured for 2013 shows a percentage distribution of 376,836 females and 456,285 males by age group. In men, the highest number of the insured belonged to the 35-39-year age group and the 45-49-year age group in women. The highest absolute difference between men and women was recorded in the 55-59-year age group, where the number of insured men was 48,449 and that of women 30,246. According to the provisional data by the Institute’s insurance records, the average pension qualifying period completed by women amounted to 18 years and 11 months and for men 18 years and 10 months at the end of 2013.

833,121

Insured

7


02

Beneficiaries of pensions

In 2013 the Institute provided for benefits for the insured and pensioners pursuant to statue: • the entitlements from compulsory pension and disability insurance according to ZPIZ-2, Article 26: - pension (old-age, early, disability, widow-er´s pension and widower’s pension part, survivor´s pension and partial pension); - benefits for remaining work capacity (benefit before and during occupational rehabilitation, benefit for waiting for an appropriate job, benefit due to a part-time job, benefit due to lower pay for performing another appropriate job, partial disability pension, benefit for occupational rehabilitation, temporary benefit, disability benefit and partial disability benefit); - annual allowance and assistance and attendance allowance and - disability allowance, lump sum for widow-ers, basic provision for widow-ers (according to transitional provisions of ZPIZ-2).

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the entitlements not covered by the compulsory insurance, provided by special laws and regulations (farmer’s pensions under the Farmers´s Old-Age Insurance Act (SZK), military pensions under the Act of Pension and Disability Insurance of Former Military Personnel (ZPIZVZ), military widow-er’s pension part under the Act Amending and Supplementing the Pension and Disability Insurance Act of Former Military Personnel (ZPIZVZ-B), pension advance payments in line with the ordinance of the Government of the Republic of Slovenia, pension supplement under the Act Regulating the Providing of Social Security to Slovene Citizens receiving pensions from the former Yugoslav Republics (ZZSV), farmer´s subsistence allowance under the Act Regulating the Provision of Subsistence to Farmers (ZPVK) and other pensions and entitlements financed from the national budget).



Beneficiaries of pensions from compulsory insurance - pensioners The table below shows long-term trends in beneficiaries of compulsory insurance pensions by pension type from 2004. The average number of pension beneficiaries from compulsory insurance has constantly been increasing on a yearly basis, in the period 2004-2013 it increased by 21.0 per cent.

In 2013 the monthly average number of old-age, early, disability, survivor’s, widow-er’s and partial old-age pensions from compulsory insurance was 602,311, which was by 16,903 pensioners (2.9%) more than in 2012.

Trends in the average number of beneficiaries of individual pension types in compulsory insurance between 2004 and 2013 Type of pension received Year

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Survivor’s and widow-er’s Total

Survivor’s

Widow-er’s

Partial old-age

Total

3

4=5+6

5

6

7

8=2+3+4+7

308,348

96,556

92,827

76,038

16,789

95

497,826

314,983

96,665

93,231

73,254

19,977

109

504,988

2006

322,617

95,736

92,304

69,297

23,007

138

510,795

2007

332,616

94,511

91,514

65,601

25,913

164

518,805

2008

342,786

93,389

91,552

62,624

28,928

206

527,933

2009

354,270

92,123

91,818

59,699

32,119

244

538,455

Old-age

Disability

1

2

2004 2005

2010

368,615

91,051

92,628

57,097

35,531

267

552,561

2011

386,263

90,219

93,117

54,409

38,708

352

569,951

2012

401,642

89,384

93,984

52,069

41,915

398

585,408

2013

417,916

88,361

95,542

51,870

43,672

492

602,311


In 2013 the average number of old-age pensioners increased by 16,274 (4.1%) compared with 2012. According to the Institute’s opinion the main reasons for a high growth rate in the average number of oldage pensioners in 2013 were the adoption of the ZPIZ-2 Act, which prescribed more severe retirement conditions. Regardless of the fact that it is possible to claim old-age pension under the ZPIZ-1 Act anytime in the future under the ZPIZ-2 transitional provisions, an extremely high number of the insured opted for retirement under the ZPIZ-1 Act towards the end of 2012 and at the beginning of 2013. Other reasons of the rise in the average number of old-age pensioners in 2013 was a high retirement rate of the baby boom generation, also conditioned by the economic and financial crisis, which has been reflected in a considerable decrease of the number of the employed; the termination of public officials’ employment as soon as they meet old-age pension requirements under a provision introduced by the Public Finance Balance Act, and finally the possibility to again start receiving one’s oldage pension which had already been granted before, together with a widow-er’s pension part, if this is more favourable than a beneficiary’s widow-er’s pension paid so far.

21%

more pensioners from compulsory insurance in period 2004 - 2013

11


The average number of disability pensioners decreased by 1,023 beneficiaries (1.1%) in 2013, evidencing a downtrend in the last decade, with the exception of 2005. These rates have partly been due to a changed legislation, more uniform implementation practiced by the boards of examiners and also the size and trends in the population of the employed, the stage of organization and development of health care, safety at work in its broadest sense as well as the type and number of diseases and injuries. The causes of disability are primarily

non-employment diseases and off-the job injuries. Injuries at work and occupational diseases have a smaller impact on the retirement rate. In 2013 the average number of survivor’s and widow-er’s pensioners together rose by 1,558 beneficiaries (1.7%). A downtrend can be established in the average number of survivor’s pension beneficiaries in the last years because the ZPIZ-1 Act divided survivor’s pension into 2 benefits: a survivor’s and widow-er’s pension. Owing to this division a

Growth rate of the average number of beneficiaries in compulsory insurance in the period 2004-2013 3.5 3.1 3.0

2.7

2.6

2.9

Growth rate in %

2.5

2,1%

2.0 2.0

1.8 1.4

1.5 1.0

1.2

2012 yearly the average growth of total beneficiaries in compulsory insurance between 2004 and 2013

1.6 1.1

0.5 0.0 2004

2005

2006

2007

2008

2009

Year

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2010

2011

2012

2013


relevant comparison of the trends in the number of survivor’s pension beneficiaries with the trends in the past cannot be made. Therefore since 2000 a negative growth rate can be established.

Percentage distribution of the average number of pension beneficiaries in compulsory insurance in 2013

The average number of partial pension beneficiaries increased by 94 (23.6%) in 2013. It is evident from the figure on the right, which shows the growth rate of the average number of total pension beneficiaries from compulsory insurance in the period 2004-2013, that the growth rate in 2013 amounted to 2.9 per cent and was by 0.2 percentage points higher compared with 2012, when it was 2.7 per cent. The average yearly growth of total beneficiaries from compulsory insurance amounted to 2.1 per cent between 2004 and 2013. As to the percentage distribution of pensioners the highest relative proportion was represented by old-age pensioners (69.4%), followed by disability pensioners (14.7%), survivor’s pensioners (8.6%) and widow-er’s pensioners (7.3%) in 2013. 55.6 per cent of the beneficiaries of old-age, disability, survivor’s and widow-er´s pensions were female and 44.4 per cent male.

7.3%

0.1%

8.6%

14.7% 69.4%

Old-age

Widow-er’s

Disability

Partial

Survivor’s

55.6 % women

44.4 % men

13


Beneficiaries of old-age, partial old-age and disability pensions from compulsory insurance by five-year age group and gender in December 2013

Age in years

Women

14,676

85 +

9,734

20,748

80-84

20,192

30,077

75-79

34,732

41,542

70-74

50,753

47,165

65-69

56,894

59,837

60-64

58,407

32,565

55-59

19,942

3,768

50-54

5,518

1,364

45-49

1,741

559

40-44

717

219

35-39

376

70

30-34

162

12

25-29

56

0

20-24

4

80,000

60,000

40,000

20,000

0

0

20,000

40,000

60,000

80,000

The highest number of old-age, partial old-age, disability pension beneficiaries from compulsory insurance (female and male) belonged to the age-group 60-64 in December 2013.

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Men


Average age of old-age and disability pension beneficiaries in compulsory insurance by pension type and gender in December 2013 Type of pension

Women

Men

Years

Months

Years

Months

Old-age

69

6

70

0

Disability

66

8

66

7

Total

69

1

69

3

In 2013 the average retirement age of new female old-age pensioners was 58 years and 4 months, new female disability pensioners 51 years and 2 months. In that year the average retirement age of new male old-age pensioners was 60 years and 9 months, new male disability pensioners 53 years and 10 months. The following two tables show the average pension qualifying period of old-age, disability, survivor’s and widow-er’s pension beneficiaries in 2013. The first table presents the average pension qualifying period of total pension beneficiaries in compulsory insurance by pension type and gender, while in the second one the relative proportions of pension

beneficiaries of all pension types under compulsory insurance by gender and 5-year period of completed pension qualifying periods are displayed. In 2013 old-age pensions were granted to women with 36 years and 3 months of pension qualifying periods on the average and men with 38 years and 1 month. In the same year women who received their disability pension had completed 27 years and 7 months of pension qualifying periods on the average, the completed pension qualifying periods by men were identical.

Average pension qualifying period of old-age, disability, survivor’s and widow-er’s pension beneficiaries in compulsory insurance by pension type and gender in December 2013 Type of pension Old-age

Women

Men

Years

Months

Years

Months

33

9

37

6

Disability

24

4

26

11

Survivor’s or widow-er’s

28

0

22

2

Total

31

4

34

10

15


Percentage distribution of pension beneficiaries in compulsory insurance by gender and completed pension qualifying period in December 2013 Qualifying period

Women

Men

Total

Up to 14 years

5.3

3.4

4.5

15-19

5.5

3.9

4.8

20-24

8.8

6.2

7.6

25-29

9.0

7.1

8.2

30-34

21.4

10.6

16.6

35-39

43.9

28.6

37.1

40 and above Total

6.1

40.2

21.2

100.0

100.0

100.0

The average pension drawing period is affected by legally prescribed requirements (significantly milder retirement conditions in the past) and population longevity.

the average disability pension drawing period was 24 years 6 months in women and 18 years 8 months in men; the average pension drawing period of survivor’s and widow-er’s pensioners was 12 years 6 months.

The pension drawing period of old-age pensioners in women was 22 years 8 months and 16 years 8 months in men in 2013. In that year

Average gross pension amounts in compulsory insurance in December 2013 Type of pension

in EUR

Old-age

616.42

Disability

476.25

Survivor´ s or widow-er´s

388.40

Partial widow-er´s

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62.42


The breakdown of total old-age pension beneficiaries by pension rate groups in December 2013 shows that more than a half of the beneficiaries belonged to the group between EUR 500.01 and 1,000.00.

Percentage distribution of old-age pension beneficiaries in compulsory insurance by gross pension rate in December 2013

60 52.9

40 29.6

30

7.7

2.6

1,500.01 and over

7.2

1,000.01-1,500.00

20 10

500.01-1,000.00

100.01-500.00

0 Up to 100.00

Percentage distribution (%)

50

Amount in EUR 17


Beneficiaries of disability insurance benefits Disabled workers with remaining work capacity can be entitled to a parttime job corresponding to their remaining work capacity, to perform or be moved to another appropriate job, to occupational rehabilitation; in relation thereto they can be entitled to corresponding benefits, i.e.: benefit due to a part-time job, benefit due to lower pay for performing another appropriate job, benefit for waiting for appropriate job, benefit for the period of waiting for retraining, partial disability pension or partial disability benefit, benefit for occupational rehabilitation, temporary benefit and disability benefit. ZPIZ-1 did not prescribe a recalculation of the entitlements for the insured with remaining work capacity which had been granted under the previous legislation, therefore the statistical data regarding the beneficiaries of benefits have been broken down according to the act under which their benefits have been granted (ZPIZ, ZPIZ-1 and ZPIZ-2). The system of benefit assessment under the ZPIZ-1 Act, which took effect on 1 January 2003, introduced several changes in the field of disability insurance. One of the major changes was the new disability definition, which also led to changes in the assessment of benefits for working disabled persons. The following new benefits from disability insurance have been prescribed: partial disability pension, benefit for occupational rehabilitation, temporary benefit and disability benefit. Under ZPIZ-2 the only change regarding disability benefits was a different name for partial disability pension, i.e. partial disability benefit.

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In 2012 their share was 55.5 per cent of total disability benefits under ZPIZ-1 and as much as 60.1 per cent under ZPIZ-1 and ZPIZ-2 in 2013. The table shows the average number of disability benefit beneficiaries under the acts ZPIZ, ZPIZ-1 and ZPIZ-2. It reflects that the number of beneficiaries under ZPIZ has been decreasing and increasing under ZPIZ-1 and ZPIZ-2. The average number of total benefit beneficiaries of all benefits from disability insurance decreased from 48,484 in 2012 to 46,952 in 2013 (by 3.2%). The reason for the decrease in the number of beneficiaries is the obtaining of a pension entitlement or a changed disability situation, which is the basis for the acquiring of new entitlements under ZPIZ-1 and ZPIZ-2.

3,2% less beneficiaries of disability insurance benefits as in 2012


Average number of disability benefit beneficiaries in the period 2004-2013 Type of benefit Till 31. December 2002

As from 1. January 2003

Before and during retraining

Before employment

Due to part-time job*

Due to lower pay

Partial disability pension / partial disability benefit**

2004

211

17,489

13,310

15,578

772

21

1

761

48,143

2005

135

17,349

12,690

14,398

2,853

117

12

3,348

50,902

2006

70

17,043

11,893

13,150

4,620

199

30

5,768

52,773

2007

30

6,057

255

63

7,713

53,473

2008

15

15,923

10,452

10,338

7,720

267

116

9,816

54,647

2009

8

15,142

6,158

8,859

9,113

277

188

11,297

51,042

2010

4

14,197

5,235

7,433

10,083

301

253

12,396

49,902

2011

3

10,764

333

322

13,252

48,576

2012

2

11,996

4,266

5,310

11,836

360

398

14,316

48,484

2013

1

10,860

3,289

4,567

12,444

350

473

14,968

46,952

Year

16,481

13,133

11,197

4,643

11,677

6,126

For occupational rehabilitation

Temporary benefit

Disability benefit

TOTAL

* The number of beneficiaries of benefits due to a part-time job decreased by 3,744 in March 2010 compared with February 2010, which was due to a non-uniform data sampling by individual regional units. The table shows the adjusted number of benefit beneficiaries, the figure on the next page the adjusted growth indices from 2009. ** Since 2013.

19


Growth rate of the average number of benefit beneficiaries in disability insurance in the period 2004-2013 8 5.7

6 4

5.0

3.7

Growth rate in %

2.2 2 0

-0.2

1.3 -2.2

-2

-2.7

-4

-3.2

-6 -8

-6.6 2004

2005

2006

2007

2008

2009

Year 20 / www.zpiz.si

2010

2011

2012

2013

The following figure shows the percentage distribution of the average number of benefit beneficiaries in disability insurance in 2013, the subsequent table, however, presents the average benefit amounts in December 2013.


Average benefit amounts in disability insurance in December 2013

Percentage distribution of the average number of benefit beneficiaries in disability insurance in 2013

1.0%

7.0% 9.7%

0.7%

Type of benefit

in EUR

Due to part-time job

296.46

Due to lower pay

183.25

Before employment

427.66

Before and during retraining

447.95

Partial disability pension

275.69

For occupational rehabilitation

397.42

Temporary benefit

152.46

Disability benefit

176.30

Partial disability benefit

0.0%

-

31.9% Disability benefit Partial disability pension/partial disability benefit Before employment Due to lower pay Due to part-time job Temporary benefit For occupational rehabilitation

23.1%

Before and during retraining

26.5% 21


Beneficiaries of annual allowance and assistance and attendance allowance Once a year annual allowance is received by pension beneficiaries (but for those who became entitled to pension on the basis of insurance for a reduced scope of rights and beneficiaries of pensions under SZK) and beneficiaries of some benefits from disability insurance. In 2013 the annual allowance amounts were prescribed by the Fiscal Balance Act.

This act also had effect on the beneficiaries’ number because annual allowance was not paid to the beneficiaries of pensions and disability benefits which were higher than EUR 622.00 in July 2013. Annual allowance was paid as a lump sum with pensions for July 2013.

Average number and growth rates of annual allowance and assistance and attendance allowance beneficiaries, 2004-2013 Annual allowance

Assistance and attendance allowance

Year Number

Growth rate in %

Number

Growth rate in %

2004

520,201

4.6

26,241

4.1

2005

529,603

1.8

27,155

3.5

2006

535,932

1.2

27,656

1.8

2007

543,928

1.5

28,799

4.1

2008

554,955

2.0

29,599

2.8

2009

563,889

1.6

30,092

1.7

2010

579,694

2.8

30,497

1.3

2011

599,942

3.5

30,731

0.8

2012

398,400

-33.6

30,497

-2.2

2013

407,529

2.3

29,840

-0.8

Note: Apart from the stated number of annual allowance beneficiaries in 2013 there were 880 others who received it with the usual payment under ZZSV (Act Regulating Social Security Protection for Slovenian Citizens Receiving Pensions from the Former SFRJ). 22 / www.zpiz.si


Annual allowance was paid in three different rates. 107,946 beneficiaries received the lowest amount (EUR 166.00), 114,398 beneficiaries the medium amount (EUR 223.56), 95,248 the highest amount (EUR 367.95) and 89,937 a pro rata amount. The total amount of beneficiaries was by 2.3 per cent higher in 2013, compared with 2012. The average number of annual assistance and attendance allowance beneficiaries fell by 0.8 per cent in 2013 in comparison with 2012, i.e. to 29,840 beneficiaries. In 2013 the lower amount was received by 18,279 beneficiaries (61.3%), the higher by 10,418 (34.9%), attendance and assistance allowance for most severely impaired persons by 529 beneficiaries (1.8%) and a pro rata amount by 614 beneficiaries (2.1%).

Average amounts of assistance and attendance allowance in 2013 Type

in EUR

For severly disabled persons

418.88

Higher benefits

292.11

Lower benefits

146.06

23


Beneficiaries of disability allowance, lump sum for widow-ers and basic provision for widow-ers Compared with 2012, the average number of the beneficiaries of disability allowance on grounds of physical impairment decreased by 1.4 per cent in 2013. Under ZPIZ-2 there are few possibilities to become entitled to disability allowance for physical impairment. Under transitional provisions of this act, until the regulations in the field of the protection for disabled persons take effect, which will prescribe the

establishment procedures, types and stages of physical impairment, applicants can become entitled to this benefit under the conditions stipulated in ZPIZ-1, yet on condition physical impairment is the result of an injury at work or occupational disease, which is established by an Institute’s medical expert.

Average number of disability allowance beneficiaries, 2004-2013 Year

Disability allowance

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Number

53,738

54,662

55,266

55,575

55,914

56,193

56,297

56,493

56,241

55,441

Growth rate in %

2.0

1.7

1.1

0.6

0.6

0.5

0.2

0.3

-0.4

-1.4

Disability allowances for beneficiaries who were awarded this entitlement under the legislation valid until ZPIZ-2 took effect are paid in the same amount they were paid in the last month before the new act took effect. New disability allowances for physical impairment awarded

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in 2013 on grounds of injuries at work or occupational diseases are also paid in the amount prescribed for the month preceding the date ZPIZ-2 took effect.


Amounts of disability allowance for physical impairment in 2013 Disability allowance

Amount in EUR

Due to injury at work or occupational disease

From 41.46 to 99.48

Due to out of work injury or disease

From 29.02 to 69.64

Under ZPIZ-1 lump sum for widow-ers could be claimed by a widowwidower who did not meet the prescribed conditions for widow-er’s pension. Under ZPIZ-2 this entitlement was abolished. The beneficiaries who were granted this entitlement before ZPIZ-2 took effect receive their benefit in the amount paid in the month directly preceding the date the new act took effect. One person on average received lump sum for widow-ers in 2013 and 2 persons in 2012. Under ZPIZ-1 basic provision for widow-ers could be claimed by a widow-widower once the entitlement to lump sum for widow-ers had terminated, on condition he-she was registered with the Employment

Service and qualified for guaranteed income pension supplement. They were also entitled to basic provision for widow-ers if they were not entitled to widow-er’s pension anymore since they did not meet the conditions regarding the prescribed age. Under ZPIZ-2 this entitlement was abolished. Those who received this entitlement before ZPIZ-2 took effect receive it in the amount identical to that paid in the month directly preceding the date the new act took effect. 15 persons on average received basic provision for widow-ers in 2013 and 25 persons in 2012. In December 2013 10 persons received basic provision for widow-ers, its average rate was EUR 273.05.

25


Pension beneficiaries not covered by the compulsory insurance The table shows trends in the number of pension beneficiaries not covered by compulsory insurance by pension type from 2004. In 2013 the average number of beneficiaries of pensions under SZK

decreased by 23.1 per cent, military pensions by 5.5 per cent, the average number of pension advance payments remained at the same level as in 2012.

Average number of beneficiaries of pensions under SZK, military pensions and pension advance payments, 2004-2013 Type of pension Year

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Under SZK

Military

Advance

Total

1

2

3

4

5 = 2 to 4

2004

5,367

4,197

324

9,888

2005

4,522

4,089

298

8,909

2006

3,784

3,962

277

8,023

2007

3,157

3,829

250

7,236

2008

2,588

3,699

206

6,493

2009

2,087

3,550

168

5,805

2010

1,714

3,394

126

5,234

2011

1,350

3,248

11

4,609

2012

1,067

3,082

5

4,154

2013

821

2,911

5

3,737


In December 2013 the average rate of farmer´s pension under SZK amounted to EUR 262.17, the average military pension EUR 900.23 and the average pension advance payment EUR 172.42. In March 2009 the Act Amending the Act Regulating Pension and Disability Insurance Entitlements for Former Military Personnel took effect, which brought the possibility of claiming a widow-er’s pension part for those persons whose deceased partner had retired under military regulations. In December 2013 there were 319 beneficiaries of military widow-er’s pension parts, the average amount was EUR 85.11.

Under the Act Regulating Social Security to Slovenian Citizens Receiving Pensions from Former Yugoslavia’s Republics (ZZSV), beneficiaries can claim pension supplement. In 2013 there were 1,224 beneficiaries of pension supplements under this Act, i.e. 6.6 per cent less than in 2012 on average. The number of beneficiaries is constantly decreasing, the only exception being the year 2011 when their number increased due to the Agreement on Social Security between Slovenia and Serbia, concluded at the end of 2010.

Average number and growth rates of pension supplement beneficiaries, 2004-2013 Pension supplement

Year 2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Number

1,855

1,801

1,680

1,487

1,432

1,388

1,335

1,404

1,311

1,224

Growth rate in %

-0.6

-2.9

-6.7

-11.5

-3.7

-3.1

-3.8

5.2

-6.6

-6.6

27


Beneficiaries of benefits – from abroad According to provisions of ZPIZ-2, international agreements and EU regulations the Institute shall pay pensions and other cash benefits to beneficiaries with their permanent residence abroad. Entitlements from pension and disability insurance can be claimed on the basis of international agreements on social security and Regulation (EU) No 883/2004. Under international agreements on social security the insured can claim old-age, early, disability, widow-er’s and survivor’s pensions and assistance and attendance allowance in the Republic of Slovenia. Pension entitlements under international agreements are paid to other contracting countries on condition beneficiaries have their permanent residence there.

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Under Regulation (EU) No 883/2004 entitlements to old-age, early, disability, widow-er’s and survivor’s pensions and assistance and attendance allowance can be claimed in the Republic of Slovenia. Pensions and other benefits granted under this regulation are paid to other member countries where beneficiaries reside. In 2013 the Institute paid, in line with the EU Regulation and bilateral agreements, 76,362 pensions to beneficiaries abroad on the average in 43 countries, 58,454 under bilateral agreement, 14,828 to beneficiaries in EU and EEC countries, 913 to other foreign countries and 2,167 to recipients of pensions paid in Slovenia for other countries.


The average number of beneficiaries and their percentage distribution by permanent residence, payment amounts and average monthly amount of pensions or pro rata pensions by country in 2013 Recipients

Payments (regular and irregular)

Country Average number

Perc. distr. (%)

Amounts in EUR

Austria

2,496

3.3

3,771,408

2.1

111.99

Belgium

75

0.1

103,611

0.1

107.90

Bulgaria

14

0.0

20,253

0.0

93.47

Czech Republic

39

0.1

107,323

0.1

217.56

Denmark

8

0.0

32,100

0.0

115.54

Finland

5

0.0

12,125

0.0

162.02

France

412

0.5

457,515

0.2

81.15

Greece

3

0.0

8,398

0.0

233.29 116.46

Italy 1

Perc. distr. (%)

Average monthly pension or pro rata share of pension (regular payments), in EUR

1,216

1.6

1,836,075

1.0

Liechtenstein

10

0.0

6,709

0.0

48.77

Luxembourg

39

0.1

52,101

0.0

108.06

Hungary

26

0.0

65,534

0.0

205.96

Netherlands

112

0.1

246,767

0.1

172.90

Germany

9,515

12.5

12,440,255

6.8

98.66

Norway

4

0.0

7,241

0.0

144.82 205.70

Poland

12

0.0

30,869

0.0

Slovakia

37

0.0

93,523

0.1

171.77

Spain and Portugal

22

0.0

40,130

0.0

148.77

Sweden

392

0.5

385,615

0.2

78.57

Switzerland

372

0.5

602,521

0.3

121.66

United Kingdom and Ireland Total 1

19

0.0

51,059

0.0

240.14

14,828

19.4

20,371,134

11.1

103.61

29


Recipients

Payments (regular and irregular)

Country Average number Australia Bosnia and Herzegovina Montenegro 2

3

Amounts in EUR

Perc. distr. (%)

1,497

2.0

1,480,924

0.8

76.15

19,453

25.5

53,158,149

29.0

208.02

359

0.5

1,165,496

0.6

229.61

26,751

35.0

72,138,184

39.4

214.09

Canada and Argentina

610

0.8

913,650

0.5

107.58

Macedonia

1,156

1.5

2,760,001

1.5

181.02

Serbia

8,628

11.3

24,112,997

13.2

208.93

Total 2

58,454

76.5

155,729,400

85.0

206.11

Brazil, Israel, South Africa, Monaco, New Zealand, Thailand, Turkey, Venezuela

10

0.0

41,641

0.0

350.78

Croatia

Indonesia Kosovo Russian Federation United States Total 3

4

Perc. distr. (%)

Recipients of pensions paid in Slovenia for other countries Total 1+2+3+4

4

0.0

9,337

0.0

198.91

812

1.1

2,536,677

1.4

222.05 220.60

3

0.0

14,071

0.0

84

0.1

362,307

0.2

294.17

913

1.2

2,964,033

1.6

229.99

2,167

2.8

4,171,857

2.3

150.47

76,362

100.0

183,236,423

100.0

184.89

1-pensions to EU and EEC countries; 2-pensions under international agreements; 3-pensions to non-EU countries *Croatia, which accessed EU on 1 July 2013, has been ranked among the countries to which pensions are paid under international agreements.

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Average monthly pension or pro rata share of pension (regular payments), in EUR


The following figure shows percentage distribution of beneficiaries of pensions paid abroad according to legal basis regulating the relations between the Republic of Slovenia and a foreign country. Percentage distribution of pension beneficiaries abroad by the status of a country in 2013

1.2%

2.8% Beneficiaries from countries with an international agreement with Slovenia Beneficiaries from EU and EEC coutries Beneficiaries of pensions paid in Slovenia for other countries Beneficiaries from countries outside EU

19.4% 76.5%

In 2013 total expenditure for pensions and pro rata pensions amounted to EUR 183.2 million. 11.1 per cent of expenditure were paid to EU and EEC countries, the highest relative proportion to Germany (61.1%), followed by that to Austria (18.5%); 85.0 per cent under international

agreements, the highest relative proportion to Croatia (46.3%), followed by that to Bosnia and Hercegovina (34.1%) and Serbia (15.5%). 1.6 per cent were paid to non-EU countries and 2.3 per cent of total pension expenditure to foreigners whose pensions are paid in Slovenia.

31


03

Financial management

The Institute’s financial operations depend on macroeconomic trends, the population’s social structure, demographic trends, total sum of payments stipulated by pension and disability insurance regulations

and statutorily regulated ways regarding the providing of inflows of public resources towards financing the entitlements.


Revenue The main Institute’s revenue sources are tax revenues (social security contributions and other taxes); transfers (payments from the national budget; contributions for pension and disability insurance on parental compensations by the Ministry of Labour, Family, Social Affairs and Equal Possibilities (MDDSZ); contributions for pension and disability insurance on unemployment benefits by the Employment Service of the Republic of Slovenia (ZRSZ) and contributions for pension and disability insurance on sick leave compensations, which are paid directly to beneficiaries by the Health Insurance Institute of the Republic of Slovenia (ZZZS); inflow from the Pension Fund Management plc (KAD); other revenues (non-tax revenues, capital revenues and funds received from the European Union).

Percentage distribution of the Institute’s revenue in 2013

0.9%

33.1%

Total Institute’s revenue in 2013 amounted to EUR 4,949.0 million. As to the distribution of revenue, 66.1 per cent are taken up by tax revenues, 33.1 per cent by transfer revenues and 0.9 per cent by other revenue.

66.1% Tax revenues (contributions and other taxes) Transfer revenues Other revenues

33


Tax revenues (contributions and other taxes) Tax revenues are revenues from social security contributions and other taxes. Revenue from social security contributions stood at 3,269.3 million euros in 2013, there were no other taxes.

Percentage distribution of social security contributions in 2013

Revenues from contributions consist of employee contributions, employer contributions, self-employed contributions and other contributions. Their level depends on the level of the earnings received and insurance bases, the number of insured persons, contribution rate, the recovery of outstanding contributions and default interest rate regarding contribution payment. Employee contributions amounted to 1,798.9 million euros in 2013 and decreased by 2.3% compared with 2012; employer contributions amounted to 1,170.1 million euros and fell by 2.8% in 2013 in comparison with 2012; contributions by the self-employed amounted to 178.7 million euros and were by 3.6% lower than in 2012. Other social security contributions totalled 121.6 million euros and grew by 2.7% compared with 2012.

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5.5%

3.7%

35.8% 55.0%

Employees´ contributions

Self-employed contributions

Employers´ contributions

Other contributions


Tax revenues and their share in the Institute´s revenue The highest relative proportion in the percentage distribution of the Institute’s total tax revenues in the period 2004-2013 was employee contributions, followed by employer contributions. In 2013 employee contributions amounted to 55.0 per cent in the percentage distribution of Institute’s total tax revenues, followed by employer contributions (35.8%), self-employed contributions (5.5%)

and other contributions (3.7%). The tax revenue share in the Institute’s revenue (the right axis in figure below) increased from 69.0 per cent to 72.6 per cent in the period 2004–2008, after that it started to decrease and totalled 68.0 per cent in 2011. In 2012 the share again increased to 69.0 per cent and decreased by 2.9 percentage points in 2013, totalling 66.1 per cent.

70

Percentage distr. of tax revenues (in %)

60

58.5

58.7

58.7

58.8

72.2

58.8

58.4

58.1

57.7

55.0

55.0

72

70.7

50 69.6 40

73

72.6

70.1

71 70

69.4

69.0 34.5

35.8

69.0 33.9

34.1

34.3

34.6

34.6

34.6

34.6

69

35.9

30 68

68.0 20

10

4.8 2.1

4.8

4.9

3.5

3.2

2.8

66.1 5.5

5.5

5.0

4.9

2.4

1.9

1.8

1.9

1.8

5.0

4.7

4.8

0.1

0.0

3.7 0.0

67 66 65

0 2004

2005

2006

2007

2008

2009

2010

2011

2012

Share of tax revenues in total revenue of the Institute (in %)

Percentage distribution of tax revenues and their share in the Institute’s revenue in the period 2004-2013

2013

Year Employees´ contributions

Employers´ contributions

Self-employed contributions

Other contributions

Other taxes

Share of tax revenues in the Institute´s revenue

35


Transfer revenues According to economic classification transfer revenues include the revenue from state budget, ZRSZ, MDDSZ, ZZZS and KAD. The revenue from state budget is resources from current liabilities and inflow owing to higher pensions under special regulations (ZPIZ-2, Art. 161) as well as resources for additional liabilities and those to cover the difference between the Institute’s revenue and expenditure (ZPIZ-2, Art. 162).

Percentage distribution of transfer revenues in 2013

20.2%

3.1%

In 2013 the resources from national budget (in the amount of EUR 1,539.8 million) represented 93.6 per cent of all transfer revenues. Other institutions (MDDSZ, ZZZS, KAD and ZRSZ) provided 6.4 per cent of the entire funding from public finance institutions.

1.6% 1.6% 0.1% 73.4%

Additional liabilities from the national budget Statutory obligations from the national budget Financial resources from the KAD PDI contributions from parental leave compensations of the MDDSZ PDI contributions for unemployment benefits of the ZRSZ PDI contributions from sick leave benefits of the ZZZS PDI – Pension and Disability Insurance

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Expenditure Institute’s expenditure consists of pensions, contributions for pensioners’ compulsory health insurance benefits and from disability insurance benefits, disability insurance benefits, transfers towards social security, liquid transfers abroad, transfers to nonprofit organizations and institutions and other expenses (Institute’s operational costs, Institute’s expenses for goods and services and other expenses).

Percentage distribution of the Institute’s expenditure in 2013

In 2013 the sum of Institute’s expenditure stood at EUR 4,949.0 million. The breakdown of Institute’s expenditure shows that in 2013 pensions accounted for 86.0 per cent of total expenditure, they were followed by pensioners’ health insurance contributions and health insurance contributions from disability insurance benefits (7.6%), disability insurance benefits (3.3%) and transfers towards social security, liquid transfers abroad, transfers to non-profit organizations and institutions and other expenses together with 3.2 per cent.

2.3%

7.6% 3.3%

0.8% 0.0% 0.0% 86.0% Pensions Contributions for pensioners’ compulsory health insurance and from disability insurance benefits Disability insurance benefits Transfers towards social security funding Other expenses Liquid transfers abroad Transfers to non-profit organizations and institutions 37


Pensions The highest share of total Institute’s expenditure was that for pensions (86.0%). In 2013 pensions stood at EUR 4,253.9 million. As to percentage distribution of pensions, the highest expenditure share in 2013 was that for old-age pensions paid to beneficiaries with permanent residence in the Republic of Slovenia (71.6%), followed by disability pensions (11.2%) and survivor’s and widow-er’s pensions (10.3%). Pensions paid to the states originating from the former Yugoslavia and pensions awarded in those states represented 3.4 per cent of total pensions paid; military pensions 0.7 per cent; pensions paid abroad 0.6 per cent. Pension expenditure also includes annual allowance, which represented 2.1 per cent of the percentage distribution of pensions in 2013 and, as a consequence of the Fiscal Balance Act (ZUJF), it was realized at EUR 89.2 million.

Percentage distribution of pensions in 2013 Pensions

Structure as %

Old-age pensions

71.6

Disability pensions

11.2

Survivor's and widow-er´s pensions

10.3

Pensions paid into countries of former Yugoslavia

3.4

Annual allowance

2.1

Military pensions

0.7

Pensions paid into other countries abroad

0.6

Farmer´s pensions

0.1

Pensions claimed in countries of former Yugoslavia

0.0

Other pensions Total

0.0 100.0


Disability insurance benefits This expenditure group, representing 3.3 per cent of total Institute’s expenditure, includes benefits for disabled workers who have acquired this right due to a part-time job, for the period of waiting to be transferred to another appropriate job, due to a lower pay for performing another appropriate job, for the period of waiting for occupational rehabilitation, for the period of retraining and additional training (under ZPIZ). Under ZPIZ-1 and ZPIZ-2 the Institute´s expenditure also comprises partial disability pension or partial disability benefit, disability benefit, temporary benefit and benefit for occupational rehabilitation.

Percentage distribution of disability insurance benefits in 2013

0.6% 1.1%

0.2%

6.3%

0.0%

9.9%

Disability insurance benefits in 2013 amounted to EUR 161.1 million. In 2013 a relative proportion of the benefits paid for the period of waiting to be transferred to another appropriate job was 34.5 per cent, followed by partial disability pensions or (under ZPIZ-2) partial benefits (26.7%) and disability benefits (20.7%). The lowest proportion of the funds (0.01%) was intended for benefits for retraining or additional training.

34.5% 20.7%

26.7%

Benefit for waiting for appropriate job Partial disability pension/partial disability benefit Disability benefit Benefit due to part-time job Benefit due to lower pay at another job For the duration of occupational rehabilitation Temporary benefit Other benefit Benefit before and during retraining

39


Transfers towards providing social security Transfers towards providing social security represent 2.3 per cent of total Institute’s expenditure and amounted to EUR 113.8 million in 2013. The breakdown and percentage distribution appear in the next table. The highest percentage of transfers towards providing social security in 2013 was paid as assistance and attendance allowance (66.9 %), followed by disability allowance with 30.4 per cent. In 2013 a total amount of 46.0 thousand euros for guaranteed income pension supplements and state pensions were paid in arrear because these entitlements were included in the system regulated by the Financial Social Assistance Act (ZSVarPre) and the awarding and paying of entitlements was not within the competence of the Institute anymore. Percentage distribution of transfers towards social security in 2013 Transfers towards social security funding

Structure as %

Assistance and attendance allowance

66.9

Disability allowance

30.4

Supplements to pensions claimed in countries of former Yugoslavia

2.5

Minimum pension support paid abroad

0.1

Basic provisions for widow-ers

0.1

Sum total

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100.0


Institute’s expenditure as a percentage of gross domestic product (gdp) The Institute´s expenditure as a percentage of GDP represents one of the most important macroeconomic indicators. On the one hand it evidences the social security development level in a society in terms of providing a welfare state while on the other hand it indicates the financial burden of GDP for social security expenditure.

Compulsory insurance pensions (comprising old-age, disability, survivor’s, widow-er’s pensions and widow-er’s pension parts) as a share of GDP decreased in the period 2004–2007, it began to grow in 2008 and attained 11.7 per cent in 2013. In comparison with 2012 it was by 0.3 percentage points higher.

Total Institute’s expenditure as a share of GDP with 12.4% in 2004 increased to 14.0 % in 2013, which was, compared with 2012, by 0.3 percentage points higher.

The share of benefits towards providing social security as a share of GDP stood at 0.6 per cent in the time period 2004-2011, it fell to 0.3 per cent in 2012 and 2013, primarily due to the Act Amending the Social Protection Benefits Act (ZSVarPre-A). According to ZSVarPre the entitlements to guaranteed income pension supplement and state pension were transformed into new entitlements in the field of social protection, within the competence of Social Work Centers. Consequently it was not within the competence of the Institute to decide on and pay the entitlements in 2012 and 2013 anymore but only to pay them to beneficiaries in arrear.

Expenditure on pensions as a share of GDP at 10.4 per cent in 2004 increased to 12.1 per cent in 2013, in comparison with 2012 it rose by 0.3 percentage points, primarily due to a 4 per cent increase in oldage pension expenditure in the Republic of Slovenia. This was due to the increase in pension beneficiaries, the implementation of the Act Amending Fiscal Balance Act, the ruling by the Constitutional Court of the Republic of Slovenia and the implementation of the Act for Remedying the Consequences of the Repeal of Paragraphs 2, 3 and 4 of Article 143 of the Fiscal Balance Act and GDP value.

41


Share of the Institute´s expenditure in GDP in the period 2004-2013 16

14 12,7

12,7

12,4

10,4

Share in %

10

9,8

10,4

10,2

9,8

9,9

9,7 9,6

10,9

10,8

10,4

12,1

11,7

11,5

11,3

10,9

14,0

13,7

12,0

11,8

12

13,7

13,5

13,1

11,4

11,7

9,4

9,2

8

6

4

2 0,6

0,6

0,6

0,5

0,6

0,6

0,6

0,6

0,3

0,3

0 2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Year Share of Institute’s expenditure in GDP

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Share of pensions in GDP

Share of pensions from compulsory insurance in GDP

Share of social security transfers in GDP


Data source: • Institute’s computer data processing • SURS on GDP level data Chart notes: If data values, compared to other values, are insignificant, they are denoted by 0.

Source: Service for Statistics and Analytics Pension and Disability Insurance Institute of Slovenia Kolodvorska 15 1000 Ljubljana All rights reserved Information available: informacije@zpiz.si www.zpiz.si

43


Pension and Disability Insurance Institute of Slovenia

www.zpiz.si


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