Regulation on Conditions for Realizing Pension Rights Based on Voluntary Pension Insurance, the Member Register, and Suspension of Payments and Payouts from the Voluntary Pension Fund – Unofficial Consolidated Text (NN, No. 2/2020 and 52/24)

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Croatian Financial Services Agency, 10000 Zagreb, Franje Račkoga 6, P.O. Box 164, Croatia t: 01 6173 200, f: 01 4811 507, e: info@hanfa.hr, OIB: 49376181407, MB: 02016419, w: www.hanfa.hr PRAVILNIK (REGULATION) ON CONDITIONS FOR REALIZING PENSION RIGHTS BASED ON VOLUNTARY PENSION INSURANCE, THE MEMBER REGISTER, AND SUSPENSION OF PAYMENTS AND PAYOUTS FROM THE VOLUNTARY PENSION FUND (Narodne novine No. 2/20 and 52/24 – unofficial consolidated text)

Introductory Provisions

Article 1. (NN 52/24) This Regulation prescribes: − conditions for realizing pension rights, conditions for early payout of pensions, and conditions and options for pension payouts based on voluntary pension insurance, − the method and deadlines for submitting and exchanging notifications between the pension company, fund member, and pension insurance company in the procedure for partial lump-sum payout via the pension company, − the establishment and maintenance of the fund member register, as well as publication of data from the register, and − conditions and methods for receiving requests to close personal accounts, payments into personal accounts, and transfer of members' accounts in the fund during the suspension period, conditions for determining share prices, payout deadlines, and conditions for continuing operations after the suspension of closing personal accounts and payments into members' personal accounts in the fund, as well as transfer of fund members' accounts to another fund.

Article 2. (NN 52/24) Certain terms used in this Regulation have the following meanings:

1. Hanfa is the Croatian Financial Services Agency,
2. Act means the Voluntary Pension Funds Act (Narodne novine No. 19/2014, 29/2018, 115/2018 and 156/2023),
3. Pension company is a legal entity with its seat in the Republic of Croatia that, based on Hanfa's approval, conducts the business of managing voluntary pension funds,
4. Fund means a voluntary pension fund,
5. MOD is a pension insurance company within the meaning of the law regulating the establishment, operation, and termination of pension insurance companies that pay pensions within voluntary pension insurance based on individual capitalised savings,
6. Life insurance company is an insurance company that has Hanfa's permit or approval for a group of life insurances and provides payout services from voluntary pension insurance in the form of a pension annuity in accordance with the law regulating conditions for establishment, operation, and termination of insurance companies,
7. Pension payout request is a written form for realizing pension rights submitted by the fund member or their legal heirs to the pension company, accompanied by specific documentation required by the pension company.
8. Personal account is an account maintained in a pension company, opened in the name of the fund member in a selected fund, on which paid-in financial resources and all changes to the member's personal assets are recorded during the period of individual capitalised savings.

Conditions for Realizing Pension Rights and Conditions and Options for Payout

Article 3. (NN 52/24) (1) A fund member may regularly realize pension rights no earlier than upon reaching 55 years of age, by submitting a written request for realizing pension rights to the pension company after receiving the prescribed information and an indicative calculation from paragraph 6 of this Regulation. Exceptionally, members who concluded a membership contract by December 31, 2018 may realize pension rights upon reaching 50 years of age, as well as a lump-sum payout if the asset value on the personal account after realizing pension rights is lower than 1,327.23 euros, unless otherwise agreed in the fund membership contract. (2) Exceptionally from paragraph 1 of this Article, a fund member may realize pension rights earlier than or before reaching 55 years of age, and members who concluded a membership contract by December 31, 2018 may realize pension rights before reaching 50 years of age, in the event of complete loss of working capacity or general incapacity for work. (3) The fund member shall indicate in the request from paragraph 1 of this Article the method by which they wish to realize their pension payout rights in accordance with Articles 125, 125.a, 126, 127 and 128 of the Act, without being bound thereby, as they may choose a different payout method until signing the pension payout conditions contract. (4) The request for realizing pension rights from paragraph 1 of this Article may be submitted by the fund member to the pension company no earlier than one month before reaching 55 years of age, in which case the pension company is obliged to ensure the member realizes pension rights on the day they turn 55. (5) If the request from paragraph 1 of this Article is submitted after the fund member has reached 55 years of age, the pension company is obliged to ensure realization of pension rights no later than within five working days from the date of submission. (6) Within three working days from expressing the intention to realize pension rights, the pension company is obliged to provide the fund member with an overview of all possible pension payout options from Articles 124 to 128 of the Act, with the option for payout via the pension company from Articles 126 to 128 of the Act providing, in addition to general information on options and related costs, indicative pension calculations tailored to that member as well as associated costs, so the member can make an informed decision on the payout method. The aforementioned indicative calculations must contain data on adverse, neutral, and best possible scenarios, presented clearly and unambiguously for an average member to understand, and must be based on reasonable and prudent assumptions about future market conditions and price movements. They must be accompanied by a disclaimer stating that the scenarios do not represent forecasts of what may occur. By signing the pension payout conditions contract via the pension company, the fund member simultaneously confirms they have been previously informed of all possible payout options via the pension company and associated costs. (7) The asset value on the fund member's personal account within the meaning of Article 126 paragraph 1 and Article 127 of the Act, as well as within the meaning of Article 128 paragraph 1 of the Act in case the contract from Article 115 of the Act was concluded for an indefinite period, is calculated on the day the pension company receives the fund member's written request for pension payout, but no earlier than the day conditions from Article 123 paragraph 1 of the Act for realizing pension rights are met (hereinafter: Calculation Day). (8) If membership terminates after the Calculation Day within the meaning of Article 118 paragraph 1 of the Act, or if funds are transferred to a pension insurance company (hereinafter: MOD) or life insurance company, subsequent payments into the member's personal account are possible based on a new membership contract. The same applies if the member chooses pension payout via the pension company. (9) If the member does not submit a signed pension payout conditions contract via the pension company within three months of the Calculation Day, they are deemed to have withdrawn from concluding a contract with the pension company and from the request for realizing pension rights, without restricting the member from submitting a new request. (10) After concluding a pension payout conditions contract via the pension company in accordance with Article 126 of the Act, no payments into the fund may be made to the member's personal account through which the pension is paid out. If monetary funds are nevertheless paid into the fund member's personal account after concluding the pension payout conditions contract via the pension company, the pension company is obliged to return the paid funds in nominal amount to the account from which the payment was received, except for state incentive funds. (11) If after the Calculation Day, but before membership terminates in accordance with Article 118 paragraph 1 of the Act or before a pension payout contract via the pension company is concluded in accordance with Article 126 of the Act, new payments are made into the fund member's personal account, and the member does not waive these payments with a written statement submitted to the pension company within 15 days after being formally notified by the pension company, the amounts of new payments will be added to the asset value determined on the Calculation Day. An assessment will be made as to whether conditions for payout via the pension company in accordance with Article 126 of the Act or lump-sum payout in accordance with Articles 127 or 128 of the Act still exist. (12) If, in the case from paragraph 11 of this Article, it is determined that conditions for pension payout via the pension company in accordance with Article 126 of the Act exist, the pension company will perform the necessary revaluation of annuities. If it is determined that such conditions do not exist, the pension company will notify the fund member and invite them to choose an MOD or life insurance company for pension payout via the selected provider. After choosing the MOD or life insurance company, to pay out pensions via the chosen service provider, the amount from the fund member's account will be transferred to the MOD or life insurance company for pension payout in accordance with Article 125 paragraph 1 or Article 125.a paragraph 1 of the Act. (13) The pension company will execute the transfer of funds from the fund member's account to the MOD or life insurance company no later than the fifth working day after receiving notification from the fund member about their choice of MOD or life insurance company. (14) When a fund member realizes the right to a lump-sum payout of part of their pension via the pension company based on Article 127 paragraph 1 of the Act, the pension company will notify the pension insurance company in writing or electronically immediately after executing the requested amount payout, so as to avoid a double lump-sum payout within the meaning of Article 127 of the Act and Article 115 paragraph 5 of the Act on Pension Insurance Companies (Narodne novine No. 22/14, 29/18 and 115/18 and 156/23).

Early Pension Payout in Case of Loss of Working Capacity or General Incapacity for Work

Article 3.a (NN 52/24) (1) A member of a pension fund who experiences complete loss of working capacity or general incapacity for work during the membership period may request early payout of funds on their personal account, in accordance with Article 123 paragraph 3 of the Act. (2) Early payout may be lump-sum or temporary (periodic), and is approved based on a decision by the competent authority establishing complete loss of working capacity or general incapacity for work. (3) The occurrence of complete loss of working capacity or general incapacity for work is proven by a decision of the Croatian Pension Insurance Institute deciding on pension insurance rights. (4) The right to a lump-sum pension payout in case of complete loss of working capacity or established general incapacity for work is also realized by a fund member who meets the conditions for realizing pension rights, or a member over 50 and/or 55 years of age.

Realizing Pension Rights in Case of Death of Fund Member or Pension Beneficiary

Article 3.b (NN 52/24) (1) The membership contract and the pension payout conditions contract via the pension company terminate upon the death of the fund member. (2) Heirs have the right to payout of funds on the personal account under conditions established by Article 105 of the Act and the contract concluded between the fund member and pension company, in accordance with inheritance law. (3) Immediately upon learning of the death of the fund member or pension beneficiary, the pension company closes the personal account and pays out funds on the personal account to the deceased member's heir within five working days from receiving the request from Article 2 point 7 of this Regulation.

Establishment and Maintenance of the Fund Member Register and Publication of Data from the Register

Article 4. Data entered into the fund member register must enable unambiguous identification of the fund member, and include at least the following: − first name and surname of the fund member and their OIB (Personal Identification Number) if they have one, − address (place of residence) of the fund member, city/town, postal code, country, − where applicable, first name and surname of the fund member's legal representative and for said representative address (place of residence), city/town, postal code, country, − where applicable, company name/title/first name and surname of the sponsor of a closed fund (address – seat/place of residence, city/town, postal code, country).

Article 5. (1) The pension company, or register keeper for the fund member register, is obliged to record at least the following data for each fund member in the register:

1. name of the fund and designation of fund type,
2. date of concluding the membership contract,
3. dates and amounts of payments,
4. number of allocated shares on the fund member's personal account recorded during the membership period,
5. date and share prices in the fund at which shares were allocated,
6. share balance after each allocation,
7. date of submitting the request for realizing pension rights,
8. date of closing the fund member's personal account, date and amount of funds in case of transferring the fund member's account to another fund, date and amount of funds in case of transferring funds to a pension insurance company, dates and amounts of payouts in case of pension payout via the fund, date and amount of payout in case of lump-sum payout from Articles 127 and 128 of the Act,
9. amounts of calculated exit fees,
10. share balance and share price at which shares are calculated in cases from point 8 of this paragraph. (2) The pension company or register keeper is obliged to maintain the fund member register in electronic form and in a manner that enables determining the data from paragraph 1 of this Article for each fund member. (3) In addition to the data from paragraph 1 of this Article entered into the fund member register, the pension company or register keeper is obliged to ensure availability of other data necessary for uninterrupted allocation of fund shares and ensuring realization of pension rights.

Article 6. The pension company, or register keeper, will process data from the fund member register collected based on this Regulation in accordance with the law regulating personal data protection.

Article 7. The pension company may publish only those data from the fund member register that relate to the total value of all fund members' shares, total number of fund members, and general data on the structure of fund members in a specific fund.

Conditions and Method for Receiving Requests to Close Personal Accounts, Payments into Personal Accounts, and Transfer of Fund Members' Accounts to Another Fund During Suspension Period

Article 8. (1) The pension company is obliged, during the suspension period of closing personal accounts, payments into personal accounts, and transfer of fund members' accounts to another fund (hereinafter: Suspension), to refuse concluding membership contracts, and without delay return all received payments to payers. (2) The pension company is obliged to record requests to close fund members' personal accounts and requests to transfer fund members' personal accounts to another fund during the Suspension period in order of receipt. (3) In the cases from paragraphs 1 and 2 of this Article, fund members' rights are suspended until the date of Suspension termination, and no fund member shall be placed in a preferential position. (4) During the Suspension, offering pension programs from Article 149 of the Act is prohibited. (5) The pension company, when fulfilling obligations from Article 134 paragraphs 4 and 5 of the Act, is obliged to submit a notification to Hanfa stating reasons leading to the Suspension and without delay inform the public on its website, as well as fund members and sales representatives. (6) During the Suspension, the pension company is obliged to publish on its website data in clear, simple and easily understandable language enabling members and potential members to understand the circumstances of Suspension occurrence, as well as the type and significance of risks arising therefrom. (7) The pension company may submit the notification from paragraph 5 of this Article to Hanfa in the manner prescribed by provisions of Article 11 of this Regulation.

Conditions for Determining Share Price During Suspension Period

Article 9. (1) The pension company is obliged, for the entire duration of the Suspension, to calculate net asset value and fund share price in accordance with Article 106 of the Act, where applicable. (2) If circumstances arise that would prevent calculation of net asset value and fund share price during the Suspension, the pension company is obliged to without delay notify Hanfa and the public, stating reasons why exact net asset value and fund share price cannot be calculated. (3) The pension company may submit the notification from paragraph 2 of this Article to Hanfa in the manner prescribed by provisions of Article 10a of this Regulation.

Payout Deadlines and Conditions for Continuing Operations After Suspension Termination

Article 10. (1) Requests to close fund members' personal accounts and requests to transfer fund members' personal accounts to another fund received during the Suspension period, as well as fund payouts due for execution during the Suspension period, will be executed by the pension company at the fund share price determined for the day of Suspension termination. (2) The pension company will execute requests from paragraph 1 of this Article no later than within seven days from the day of Suspension termination, satisfying conditions from Articles 123, 125, 126, 127 and 128 of the Act. (3) Upon occurrence of Suspension, the pension company is obliged to without delay publish on its website that fund members who submit requests to close personal accounts and transfer personal accounts to another fund during the Suspension period have the option during Suspension to withdraw their requests or execute them at the price from paragraph 1 of this Article.

Electronic Delivery

Article 11. (NN 52/24) (1) The pension company may submit documentation from Article 8 paragraph 5 and Article 9 paragraph 2 of this Regulation to Hanfa in the manner and in accordance with the Technical Instruction for Using the Data Delivery System in Electronic Form of the Croatian Financial Services Agency (reports.hanfa.hr) and the Instruction for Filling WEB Forms for Pension Companies. (2) It is deemed that the pension company has submitted documentation in the manner prescribed by paragraph 1 of this Article at the moment the documentation is recorded on the server for sending such documentation. (3) In justified cases of technical inability to deliver or improperly executed delivery (e.g., system failure, inability to read received documentation, etc.) in the manner prescribed by paragraph 1 of this Article, the pension company is obliged to submit documentation in written form, directly or by post for timely reporting. The pension company is obliged to submit documentation in the manner prescribed by paragraph 1 of this Article as soon as reasons for such delivery inability cease, no later than within 8 days from cessation of circumstances causing technical delivery inability. (4) Hanfa may, if necessary, request the pension company to submit certain documentation prescribed by this Regulation in original or certified copy, regardless of electronic delivery.

Final Provisions

Article 12. (1) This Regulation enters into force on the eighth day from the date of publication in Narodne novine. (2) Upon entry into force of this Regulation, the Regulation on Conditions for Realizing Pension Rights Based on Voluntary Pension Insurance, Member Register, and Suspension of Payments and Payouts from the Voluntary Pension Fund (Narodne novine No. 98/14 and 41/17) ceases to be valid. (3) The pension company is obliged, within 30 days from the date of entry into force of this Regulation, to align its operations with the provision of Article 3 paragraph 5 of this Regulation, in part concerning preparation of indicative pension calculations for fund members.

Final Provision Regulation on Amendments and Supplements to the Regulation on Conditions for Realizing Pension Rights Based on Voluntary Pension Insurance, Member Register, and Suspension of Payments and Payouts from the Voluntary Pension Fund (NN 52/24) entered into force on May 11, 2024. Article 7. This Regulation enters into force on the eighth day from the date of publication in Narodne novine.