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The new pension system introduced voluntary pension savings (the so-called third pillar of the pension insurance) in which we have the possibility of taking over the control over our own pension income and ensure a better standard in "golden years". Security of the savings and stability of the fund are important for long-term savings in the third pillar in order to have a pension secured.
AZ Benefit
AZ Benefit is a voluntary pension fund appropriate for the members who find security more important than the yield. Generally, they are older persons who will, on average, save during a shorter period. The fund portfolio consists of a larger portion of bonds, which seeks to achieve greater security of the invested funds.
The AZ Benefit fund has an extremely conservative investment policy. Under normal market conditions, the fund invests up to 90% of its assets into bonds, and up to 10% into stocks, as well as other financial instruments in accordance with the Prospectus.
Benefits
- Fund yield
By investing fund assets in different financial instruments (stocks, bonds and the like) in capital markets, the Company seeks to achieve a yield which will increase the fund assets, i.e. funds of fund members. Given the purpose of savings, investments of assets of pension funds are characterized by being long-term. Therefore, the fund yield should be analysed over a longer period (e.g. over 15 years, which is estimated to be an average savings period in a fund).
- Government incentives
The state pays out government incentives (GI) for invested funds to encourage us to invest in voluntary pension savings with additional 15% added to the value of the funds paid in one calendar year (only in one voluntary pension fund), up to a total of 663,61 EUR. This means that the amount in the account may be increased using GI, up to 99,54 EUR annually. Any member residing in the Republic of Croatia or a member who is a Croatian citizen is entitled to government incentives. Furthermore, members who are not Croatian citizens are also entitled provided that they reside in a country which is an EU Member State or a signatory of the Agreement on the European Economic Area, but are only entitled during a period when their mandatory pension insurance - second pillar contributions are paid in the Republic of Croatia.
- Tax relief for employers
Sole proprietors, the self-employed and owners of small or larger family companies do not pay additional tax or contributions for payments made into voluntary pension savings for themselves or their employees up to the amount of 67 EUR a month or 804 EUR a year.
Use
Anyone can invest in voluntary pension savings, so there is no age limit, health restrictions or conditions of employment to save in AZ voluntary pension funds.
An optimal amount of payments is 663,61 EUR annually. With that amount of payment you are entitled to max. government incentives in the amount of 99,54 EUR/year. Given that government incentives have been defined as 15% of personal contributions paid, you can get government incentives even for smaller payments.
Members are entitled to pension payout when they turn 55, which means that the only requirement for exercising the right to use the pension funds from the third pillar is their age, and not the fulfilment of the conditions for old-age pension.
As an exception, the payout can be made before turning 55 in case of death. Legal heirs, based on a decision on inheritance, need to file a request to exercise that right.
After acquiring the right to pension from voluntary pension savings, there are two payout models, depending on the amount of savings in the personal account:
- up to 13.272,28 EUR - pension payout through the Fund
- over 13.272,28 EUR - payout through a pension insurance Company
Amounts up to 13.272,28 EUR can be paid out through the fund with one-off payment in the amount of 30% of the total savings The rest of the amount will be paid out in instalments according to the defined frequency depending on the amount of instalment (monthly, quarterly, biannually, annually), but only over 5 years.
The voluntary pension company has to transfer all amounts exceeding 13.272,28 EUR from a member’s personal account to a selected pension insurance company which pays out their pension based on the selected voluntary pension program. A pension insurance company has to offer the following types of pension: lifelong old-age pension and temporary old-age pension.
Third persons can make payments to the fund account in the name of a member of an AZ voluntary pension fund: parents, guardians, employers, unions, independent service associations or any other person for the fund member.