Payment of pensions and pension benefits
Acquiring the right to pension from the First and Second Pension Pillar
Under the Law on Pension and Disability Insurance, any Mandatory Pension Fund’s member shall be entitled to an old-age pension by turning 62 years of age for women and 64 for men, and with at least 15 years of service.
When a member is entitled to a retirement pension, the full amount of accumulated funds on his/her account can be used, including the right of member’s personal choice regarding:
- Programmed withdrawals provided by the Company managing the Mandatory Pension Fund with which the member has signed a contract for programmed withdrawals.
- Buying a pension annuity payable for life by the Insurance Company authorized for this purpose.
- Combination of the two previous options.
Pension annuity, and the combination of programmed withdrawals and pension annuity shall be applicable once the first license for insurance activities in the class of annuities and annuity payout is issued.
The procedure for exercising the right to retirement shall start by Pension Fund’s member submitting an application for realization of the old-age pension right to the Pension and Disability Insurance Fund of Macedonia (hereinafter, PDIF). Following the procedure it has implemented, PDIF shall submit a copy of the Decision recognizing or not recognizing applicant’s right to a retirement pension to the Pension Company managing the Pension Fund where the applicant is a member. Any Pension Fund’s member who has an individual account in the Pension Fund shall make an application to the Pension Company, which shall, on his/her behalf start a listing at the Listing Center. The member shall specify in his/her application which types of pension payments should be included in the listing. Once the listing period is over, a summary table containing all offers for the Pension Fund’s member shall be drafted. The member has the right to select an offer from the offers contained in the summary table within a period of 30 days of validity of offers. Depending on the offer selected, the member shall sign a contract with the Pension Company whose offer he/she has accepted, the Insurance Company whose offer he/she has accepted, or with both the Pension Company and Insurance Company whose offers he/she has accepted.
Exercising the right to a pension only from the Second Pension Pillar
A Pension Fund member who has not earned the right to PDIF retirement, failing to meet the legal requirements, shall make an application for exercising the right to pension only from the Second Pension Pillar and submit it only to the Pension Company managing the Pension Fund where he/she is a member. The request for exercising the right to pension only from the Second Pension Pillar shall be submitted after the age of 65. The Pension Fund member shall be required to submit a notarized statement that he/she waives the right to a pension from the First Pension Pillar and the right to the minimum pension amount. The Pension Fund member can choose between:
- One-off payment of funds from his/her Second Pension Pillar individual account or
- Pension only from the Second Pension Pillar’s funds, if the pension is greater than, or equal to 40% of the minimum pension at the date of exercising the right to a pension from the Second Pillar.
In case a deceased Mandatory Pension Fund member has no family members who are entitled to a family pension in accordance with the Law on Pension and Disability Insurance, the funds from the account of such member shall become part of his/her estate and such funds shall be treated in accordance with the Law on Inheritance. Until then, the member’s account shall remain open and such funds shall be converted into accounting units and invested by the Company in the same way as other assets of the Mandatory Pension Fund. After the transfer of assets, the Company shall close the individual account of its deceased member.