A stochastic forecast for the Croatian pension system

Sa？etak This paper analyses the financial sustainability of the Croatian pension system after the reform that was adopted on January 1, 2019. The Croatian pension system as we know it today was started in 1999 with a reform that created the three pillars of the pension system. Over the next twenty years, Croatian economic and social conditions shifted in an unexpected way and a new reform was needed to ensure financial stability is maintained. In this paper I will analyse population trends in Croatia and forecast movements up to 2060. Afterwards, I will analyse the net government cash flow generated from the pension system, by using the forecast population numbers. The beginning year of the forecast horizon is 2018, as some data were not yet available for this year. I use stochastic methods to perform my analysis