The employee's annual personal coefficient, the most important factor in calculating the future pension, is obtained when the gross salary of that employee is divided by the average gross salary at the state level, it is clearly stated in Article 22 of the Law on Pension and Disability Insurance.
In mathematics from the third grade of elementary school, it is written that if you divide a smaller number by a larger number, you will get a negative result, i.e. lower than the number one.
So that the employees, whose gross salary remains the same from October, that is, five percent of the gross salary becomes net salary, will have a lower personal coefficient because the average gross salary will be higher due to the administrative increase of the minimum wage.
Multiplying by a smaller number always gives a lower result
For example, someone who now has an average salary of 850 euros net, his gross amount is 1.046 euros. He now has an annual personal coefficient of 1 according to the formula from the Law on PIO. When, after the measures from the "Europe Now 2" program, the average gross salary increases to the planned 1.180 euros, employees with a net salary of 850 euros so far will receive an increase in their net salary by about 50 euros, but he will still have the same gross salary of 1.046 euros.
Now his personal coefficient will be determined by dividing the amount of his gross earnings of 1.046 euros by 1.180 euros and the result will be 0,886, which is his new annual personal coefficient. This is significantly less than the previous value coefficient of 1.
The employee's personal coefficient, according to the same law, is determined by dividing the sum of annual personal coefficients by the period for which they were calculated, with each year being counted as 1, each month as 0,0833, and each day as 0,00274.
Then, the personal insurance point is determined by multiplying the personal coefficient of the insured and the years of his pension service.
This means that if someone had earnings at the average level all the time and worked for 40 years, his personal score will be 40.
In order to obtain the final amount of the old-age pension, the personal insurance point is multiplied by the value of the pension by one personal point, which is determined separately for each year, and in 2024 it is 10,14797 euros. So his starting pension for 40 years of service with an average salary would amount to 405,6 euros.
An employee who remains at the same gross salary will have a personal coefficient of 0,886, and with 40 years of service he will have a personal score of 35,44. When it is multiplied by the current value of the pension by one personal point, he will receive a starting pension of 359,6 euros, which is significantly less than the previous example of a pension.
As later annual reductions are made by multiplying the starting pension amount by the percentage increase (for example a five percent pension increase is multiplied by 1,05), this difference in amount continues.
Employees with higher salaries suffer more damage
The higher the current wages, the greater this difference, i.e. the future reduction. For example, if someone now has a net income of 1.500 euros, their gross income is 1.981 euros, and the personal coefficient is 1,85. He will have the same gross earnings after October, but due to the artificial increase of the average, his personal coefficient will drop to 1,67. The starting pension according to the current calculation would be 750,8 euros, and due to the lowering of the personal coefficient, it would be 677,8 euros.
That is, those with higher earnings, who allocate more in contributions, get lower future coefficients, compared to the current ones. Only those whose minimum wage will be increased to 600 or 800 euros will benefit, as they will have their gross earnings approach the average.
The fight against mathematics
The new acting director of the PIO Fund Vladimir Drobnjak two days ago he said that "the pensions will not be lower in the future, although the personal coefficients for certain categories of residents will be lower".
"It is not disputed if a negative personal coefficient appears, because it is not the only parameter that is calculated for pension calculation. Namely, there are two more important parameters, namely the length of service and the value of the pension for one personal point, which also affect the amount of the pension calculation", said Drobnjak at the time.
However, this contradicts the logic of mathematics from the third grade of elementary school - if you multiply three numbers, one of which is less than one, the final result (the amount of the starting pension) will always be lower than if that (now negative coefficient) had kept the value of 1 .
At each subsequent regular adjustment of the pension, the employee, who from now on receives a lower coefficient, will be harmed because he will have a lower increase in euros due to the smaller base which is increased by the adjustment percentage.
Since it was announced in mid-August that a significant number of employees will have a lower personal coefficient and future starting pension, the Government and PES have repeatedly repeated that this is not true, even though it is a very clear and simple formula from the PIO Act, which uses basic mathematical operations from the lower grades of elementary school.
They say that in the future the pension will only increase and not decrease (because it will be adjusted annually with a percentage for inflation), but they do not deny that the personal coefficient will decrease for a significant part of current workers, which determines the amount of their starting pension.
"I am personally a guarantor that pensioners will have stable pensions and that their pensions will not be reduced," said the Prime Minister yesterday Milojko Spajic, repeating that the public is being lied to that pensions will be lower.
From January 1, 1970 to December 31, 2003, the employee's personal coefficient for future pension was determined by dividing his net salary with the average net salary, and since then it has been introduced that this coefficient is obtained by dividing his gross salary with average gross earnings.
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