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Amendments to the Law on Pension and Disability Insurance allowing privatisation of spas owned by PIO fund - Tailor-made laws in the Western Balkans and Turkey

Amendments to the Law on Pension and Disability Insurance allowing privatisation of spas owned by PIO fund

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Introduction

The Law on Pension and Disability Insurance, which regulates Serbia’s compulsory pension and disability insurance system and specifies the management and financing of the Pension and Disability Insurance Fund (PIO Fund), was amended in July 2014. The amendments were approved under urgent procedure.

Country
Serbia
Sector
Culture and tourism

Description of the law

The Law on Pension and Disability Insurance, which regulates Serbia’s compulsory pension and disability insurance system and specifies the management and financing of the Pension and Disability Insurance Fund (PIO Fund), was amended in July 2014. The amendments were approved under urgent procedure.

Specifically, an amendment to Article 155 reduced the number of management board members from 21 to seven. All seven members are now appointed by the government: the minister proposes four members, and one member each is proposed by representatives of the unions, employers and pensioners. As a result, the amended law gives the government control of the management board and the capacity to decide relevant issues. Previously, the board had 21 members. The government had appointed only two out of seven members representing employers, while pensioners and unions appointed seven representatives each (see page 6).

The new management board decided to approve the privatisation of spas and resorts owned by the PIO Fund. As a result, the Vranjska Banja and Kuršumlija Banja spas were undervalued and sold to businessmen affiliated with the ruling Serbian Progressive Party (SNS). In August 2019, the pensioners association requested the annulment of the decision taken by the PIO Fund’s management board, but their request was ignored. The privatisation of PIO Fund’s spas is part of a wider government tourism strategy to privatise all spa complexes in Serbia. The pensioners association claims that the selling of spas owned by the PIO Fund is illegal, while the Anti-Corruption Council suspects systemic corruption.