Basic differences between state pension fund and VPF

Voluntary pension funds are "the third pillar" of pension system, whereas state pension fund represents "the first".

By saving in voluntary pension fund one gets old age income as an additiont to the state pension. Although private and public pensions have the same goal - ensuring the financial security of the citizens in the period when they cease to be active, there are many differences in the way they are exercised and who can achieve them.

Basic differences between state pension fund (SPF) and voluntary pension fund (VPF):

  • Pension contributions collected from the insured persons are automaticaly paid out  to pensioners (insured person and pensioner are not the same persons)
  • Minimum and maximum pension are determined by the law
  • If an insured person terminates contribution to pension fund, it affects his right to pension
  • Contributions are paid monthly
  • Contributions depend on the amount of salary
  • Paid contributions are registered on member's idnividual account from which their future pension will be paid out. Until then, their assets are invested and the realized yield is distributed to all members. 
  • The amount of pension is directly corelated with the amount of contributions, period of membership and yield
  • A member chooses  the way and frequency of penison pay out
  • Termination does not affect pension rights
  • A member decides on the paymnet dynamics. They can even choose a lump sum payment
  • Minimum pension contribution is RSD 1,000. Once paid amount can be changed whenever a member decides to
  • Contributions up to RSD 8,101 paid via administrative ban are personal income tax (10%) exempt


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