The Pensioners’ Association of Montenegro has sent a letter to the Minister of Social Welfare, Family Care and Demography, Damir Gutić, and the Director of the Pension and Disability Insurance Fund (PIO), Vladimir Drobnjak, requesting a review of the proper application of the Law on Pension and Disability Insurance related to pension adjustments.
As stated in their announcement, the association has reached out with a request to verify whether the PIO Fund is complying with the Law on Pension and Disability Insurance, in accordance with current legislation governing these institutions.
They argue that the PIO Fund continuously fails to adhere to one of the key provisions of the law, specifically Article 58, which relates to pension adjustments. Despite multiple written warnings to the Fund’s leadership about this issue, the PIO Fund has continued to make illegal decisions, including the latest pension adjustment on January 1, 2025. This, they claim, directly threatens the living standards of pensioners, the largest group of citizens in Montenegro.
They also pointed out a “deliberate fraudulent act” involving three state institutions—Monstat, the Tax Administration, and the PIO Fund—stating that Monstat, according to its annual work program, does not directly obtain data on employee earnings from the Tax Administration. As a result, a designated section on the Monstat website, which should contain this data, has been left empty and erased this year.
The association emphasized that the methodology Monstat uses to collect data is outdated, as the number of businesses has significantly increased. Consequently, the sample is no longer representative, and the data collection process is incomplete. Moreover, the manner in which Monstat sends the “RAD 1” form to companies is inadequate, and very few companies submit data, often inaccurate and inconsistent with financial statements. They further stated that only 69% of companies submitted financial statements to the Tax Administration in 2023, of which 23% provided incorrect statements, and 6% did not report data on average earnings.
Monstat’s data collection methodology excludes small businesses with fewer than 10 employees, which constitute 93.8% of all businesses in Montenegro, employing 71,402 individuals and generating a total income of 2.5 billion euros.
Adding to the absurdity of the situation, Monstat does not use the valid classification of economic entities prescribed by the Accounting Law. The association stated that, despite the chaos and the harm this causes to pensioners, as well as to other institutions relying on Monstat’s data, the only institution with reliable and up-to-date data is the Tax Administration, which regularly receives financial reports.
However, these data are not being used by Monstat or other institutions. The PIO Fund, upon receiving inaccurate data from Monstat, compounds the error by continuing to incorrectly determine the growth or decline rates for wages, ignoring the law, and resulting in a significantly lower pension adjustment rate. This, they claim, is a clear case of fraud.
They pointed to a statement made by Prime Minister Milojko Spajić at a panel at the Faculty of Economics in Podgorica, where he acknowledged that Monstat’s data is inaccurate. According to the PIO Fund’s decision, pensions for January 1, 2025, are to be adjusted by a growth rate of 6.85%, based on Monstat’s flawed data. However, applying the law correctly, they argue, the growth rate should be 8.36%.
The Pensioners’ Association further explained the calculations, demonstrating that according to the Law on Pension and Disability Insurance, pension adjustment on January 1, 2025, should be 8.36%. Despite this, the PIO Fund insisted on using a growth rate of 6.85%. They received no satisfactory clarification from the Fund, which instead pointed them to Monstat’s website.
Finally, the association stressed that this situation is not the only material harm continuously inflicted on Montenegro’s citizens, as the law itself is structured in a way that further exacerbates these issues.
