Pension Expenditure Forecast for 2016

By the end of 2016, the number of pension recipients is estimated to total 1,455,400 persons, an increase of slightly less than one per cent year-on-year.

The number of people drawing an old-age pension is predicted to amount to 1,252,000 persons by the end of the year, an increase of less than 3 per cent compared to the previous year. The number of people on a disability pension will decrease by nearly 6 per cent and the number of people receiving a part-time pension by as much as 22 per cent. The number of people receiving a survivors’ pension will decrease by slightly less than one per cent.

According to the projection, the overall statutory pension expenditure will grow by 2.7 per cent. All-in-all, the statutory pension expenditure will amount to EUR 29 billion, constituting 13.6 per cent of the estimated GDP for 2016.

The earnings-related pension expenditure will grow by an ample 3 per cent to EUR 26 billion. The majority of this expenditure consists of old-age pension expenditure, which will amount to EUR 22 billion.

The table below presents a summary of the projected pension expenditure in 2016.

2016 2015 Change
Private-sector earnings-related pensions 16 346 15 859 3.1%
– Basic provision 16 074 15 570 3.2%
– Supplementary provision 207 212 -2.4%
– Special farmers’ pensions 65 76 -14.5%
Public-sector earnings-related pensions 9 551 9 273 3.0%
Unpaid periods 129 108 19.6%
Total earnings-related pension expenditure 26 026 25 239 3.1%
National pensions 2 480 2 503 -0.9%
SOLITA pensions 515 515 0%
Total statutory pension expenditure 29 021 28 257 2.7%
Share of GDP 13.6% 13.5%

 

Earnings-related pension expenditure forecast

The annually published earnings-related pension expenditure forecast includes a projection of the statutory pension expenditure of the ongoing year and the number of pensioners receiving an earnings-related pension.

In addition to the total amounts, the forecast includes projections per sector (private and public sectors and unpaid periods), as well as per pension type (old-age, disability, part-time and survivors’ pensions, as well as farmers’ special pensions). As for the private sector, the forecasts per pension acts are also presented (Employees Pensions Acts, Seafarer’s Pensions Act, Self-employed Persons’ Pensions Act, Farmers’ Pensions Act).

The unpaid period refers to a period during which pension accrues, but not based on earnings but on some received social benefit.

The forecasted number of people receiving an earnings-related pension is per the end of the year. The forecast does not include persons who receive only a national pension, nor those pension recipients, who receive a pension under the so-called old local government pension rules (rules valid before 1 May 1964).

The pension expenditure forecast includes forecasts for earnings-related pension as well as for national pensions, SOLITA pensions (based on the Military Injuries Act, the Motor Liability Injuries Act and the Workers’ Compensation Insurance Act), and the share of the statutory pension expenditure relative to GDP.

In the forecast, the earnings-related pension expenditure has been divided into the basic and the supplementary provision. The basic provision has been specified by pension type and pension act. The supplementary pension has been specified only by pension act.

When compiling the forecast, the available data is of the first half of the year. The underlying assumption is that the percentual change in the number of year-end recipients of earnings-related pensions compared to the situation at the year-end in the previous year is the same as the percentual change at mid-year of the ongoing year compared to the mid-year of the previous year.