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The Serbian Pension System In Transition: A Silent Break With Bismarck

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  • Gordana Matković
  • Katarina Stanić

Abstract

The pension system in Ser-bia was set up as Bismarckian earnings-related system almost one hundred years ago. At the outset of the transition process at the beginning of 21st Century, the pen-sion system underwent bold reforms. De-spite suggestions from the World Bank to adopt a three-pillar system that would in-volve a break with the Bismarckian heri-tage, reforms concentrated on parametric adjustments that strengthened the link between previous earnings and pension benefits. However, as this paper shows, the Bismarckian earnings-related system has subsequently been silently challenged. On the basis of an analysis of the current and perspective replacement rates for various earning levels and pension variation in-dicators, we show how the contributions/benefit link has been undermined. These policy changes have not been defined or un-derstood as a new strategic course of action, nor have the strategic options been debated and analysed. These silent reforms have seemed to be a “quick and easy” solution to tackle high public expenditures and deficits without understanding their implications, and that breaking up with Bismarck im-plies significant transition costs.

Suggested Citation

  • Gordana Matković & Katarina Stanić, 2020. "The Serbian Pension System In Transition: A Silent Break With Bismarck," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 65(225), pages 105-134, April – J.
    • Handle: RePEc:beo:journl:v:65:y:2020:i:225:p:105-134
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    References listed on IDEAS

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    More about this item

    Keywords

    Bismarck; Beveridge; silent break; net replacement rate; pension varia-tion;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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