Capitalized voluntary pension savings: Challenges in improving the sustainability and adequacy of the Croatian pension system
Abstract:
The unfavorable demographic trends affect economic and social policies and raise fundamental questions about the adaptation of national pension systems to achieve a more adequate and sustainable model. This study provides a comparative analysis of pension systems in the CEE and SEE countries, with a particular focus on capitalized savings. Pension funds in these countries are the main non-bank financial institutions, facing the problem of insufficient portfolio diversification, legislative changes, and underdeveloped domestic financial markets. Therefore, it is necessary to investigate the performance of pension funds and their impact on the stability of financial systems. This is particularly important under conditions of instability, inflation risks, and ESG criteria. On the other hand, pension funds are critical to maintaining social security, so their performance may enhance both the sustainability and adequacy of pensions, and the reduction of overdependence on the state. There are numerous theoretical and empirical evidence to support the need to significantly increase the role of voluntary pension funds and other forms of saving for the third age. The aim of this research is to investigate the incentives and obstacles for further development of the Croatian pension system, especially voluntary pension savings, and to develop a model for improving the system of capitalized pension savings. The research will include an empirical survey of voluntary pension funds that have not made significant progress in terms of population coverage or funds collected. Survey questionnaire will target different groups of citizens (students, employees, employers, retirees) and financial experts in order to investigate the level of financial literacy, attitudes toward pension saving, and appropriate incentive measures. The system of voluntary private savings can ultimately become an important lever for economic growth and improving living standards in the third age.
Key words: Voluntary pension funds, voluntary pension savings, ESG
