Montenegro’s Pension Fund Clarifies Pension Adjustment Process

The Pension and Disability Insurance Fund (PIO) of Montenegro has clarified that it does not create pensions but adjusts them according to legal standards. This statement follows the announcement of pension adjustments made in January 2023, emphasizing the legal framework behind these changes.

According to the PIO, the fund serves as the executive body implementing the Law on Pension and Disability Insurance. The adjustment process is governed by Article 58 of the law, which stipulates that pension adjustments are based on official statistical data provided by the Statistical Office of Montenegro (MONSTAT). The adjustments utilize a “rotating” formula that considers two key factors: changes in consumer prices (inflation) and variations in average wages.

The PIO highlighted that the adjustment percentage of 0.38 percent for January is a direct mathematical outcome derived from these parameters during the previous evaluation period. The fund lacks the legal authority to arbitrarily change, increase, or decrease this percentage.

Furthermore, the PIO reminded the public that since 2022, pensions have been adjusted three times a year, specifically on January 1, May 1, and September 1. This adjustment frequency allows for a more responsive approach to economic changes within the country, aiming to maintain the living standards of pensioners. Historical data indicate that there have been periods without any annual adjustments, including the years 2013, 2014, and 2015, when no adjustments were made at all.

Currently, the average pension in Montenegro stands at 553 euros, which positions the country as a leader in pension levels within the regional context. The PIO emphasizes the necessity of comparing average pensions with those in similar countries that are also EU candidates, which offers a clearer perspective on the status of retirees in Montenegro.

In conclusion, the PIO of Montenegro remains dedicated to strictly applying the law and protecting the interests of pensioners by ensuring regular and secure payments of their benefits. This commitment reflects the fund’s ongoing efforts to enhance the financial security of its beneficiaries while adhering to established legal guidelines.