The law additionally provides for the introduction of several levels of the minimum pension based on the length of service, limiting the highest pensions in order to reduce inequality, strengthening protective mechanisms in the system, and expanding the right to reimbursement of funeral costs.
On Tuesday, the House of Representatives of the Parliament of the Federation of Bosnia and Herzegovina (FBiH) adopted the Proposal of Amendments and Supplements to the Law on Pension and Disability Insurance, one of the key reforms and social laws in the current mandate. The text has been forwarded to the House of Peoples of the FBiH, which will consider it on January 23rd.
The law directly affects more than 465.000 pensioners in the FBiH and aims, as emphasized by the competent entity, the Ministry of Labour and Social Policy, at the long-term stabilization of the pension system.
Semi-annual adjustment
The key novelty is a new model for adjusting pensions, which combines the growth of consumer prices and the average wage in a ratio of 60:40 or 40:60, with the more favorable option for pensioners being applied. Acquired rights remain protected, and pensions cannot be reduced by any adjustment.
According to estimates by the Government of the FBiH, the new model would bring a total increase in pensions of about 17% in 2026, compared to approximately 5% under the current law. From 2026, semi-annual pension adjustment is also introduced, twice a year; on January 1st and July 1st.
The law additionally provides for the introduction of several levels of the minimum pension according to length of service, limiting the highest pensions to reduce inequality, strengthening protective mechanisms in the system, and expanding the right to reimbursement of funeral costs. Reimbursement of funeral costs (death benefit) for a pensioner amounts to the value of one average paid pension, which is about 651 BAM, and under the previous law, this right could only be exercised by a member of the immediate family. With the new amendments, this right is now extended to any other person who bore the funeral costs.
“These are not perfect, but they are realistic and financially sustainable solutions, significantly better than the existing ones,” said Adnan Delic, Federal Minister of Labour and Social Policy, emphasizing that the amendments were made in agreement with and at the request of the FBiH Association of Pensioners’ Associations.
The amount of the minimum pension, according to the new solutions, will no longer be the same for everyone, but will increase depending on the number of years an employee spent in employment and paid contributions during that time. The minimum pension for insured persons with less than 20 years of service cannot be lower than 60% of the average pension from the previous year, while for pensioners with 20 or more, but less than 25 years of service, that threshold is 65%; for 25 to less than 30 years of service, 70%; for 30 to less than 35 years, 75%; for 35 to less than 40 years of service, 85%; while for 40 or more years of pensionable service, the minimum pension cannot be lower than 95% of the average pension.
If you retire with 15 years of service, the minimum pension you will receive amounts to 460 BAM, after the announced pension increase in July of this year.
The previous system implied a single amount of the minimum pension, regardless of whether the insured person had accrued 15, 20, or more years of service, and pensions were adjusted once a year, according to the growth of consumer prices (inflation).
Pension system in Republika Srpska (RS)
With these amendments, the two entity pension systems have been partially harmonized. In the RS, a system is already in force under which the minimum pension is linked to length of service and differs for different categories of pensioners.
Pensions in RS are adjusted once a year, most often according to wage growth or inflation. The average and minimum pension in RS are lower than in the FBiH.
The minimum pension in the FBiH for December amounted to 599.28 BAM, the guaranteed pension to 715.21 BAM, while the highest paid pension amounted to 2.996.40 BAM. So far, an amount of 315.5 million BAM has been required for the payment of pensions (465.132 beneficiaries).
In RS, in December 2025, according to data from the Pension and Disability Insurance Fund, 293.715 pensions were paid. The minimum pension with 15 years of pensionable service amounted to 328.19 BAM, 15-20 years to 393.87 BAM, 20-30 years to 459.53 BAM, 30-40 years to 525.23 BAM, while the minimum pension with 40 years of pensionable service amounted to 656.55 BAM. The highest paid pension was in the amount of 3.547.30 BAM.
