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Pension Reform in Serbia

2006–2010 || U.S. Agency for International Development


The USAID-funded Serbian Economic Growth Activity (SEGA) worked with the Government of Serbia (GoS), its institutions and private sector enterprises between 2006 and 2010 to implement a variety of reforms, including pension reform.  Overall, the project aimed to help strengthen macro-economic conditions through improved fiscal and monetary policies and resulted in a restructured and modernized financial sector which helped the country absorb the effects from the global financial crisis better than many of its European neighbors.  In the pension reform component of the project, the Deloitte team worked closely with local stakeholders to strengthen the nation's capacity to establish and maintain an economically viable pension system, which is an integral part of achieving macroeconomic stability and securing the country's financial future.

The Challenge

A pressing challenge to achieve macroeconomic stability was the reform of the State pension system, inherited from the Communist era.  The pay-as-you-go system was fiscally unsustainable and represented a growing share of budget transfers. Serbia's challenge in reforming the pension system was rooted in an incomplete understanding of the issues and inadequate analysis and policy-making tools to evaluate reform options.

How We Helped

Deloitte’s work helped strengthen fiscal decision-making capabilities and supported the development and implementation of policy reforms which are intended to lead to an economically viable pension system. Working closely with the GoS and local academics, SEGA activities addressed knowledge gaps identified among local specialists and policy-makers, strengthened tools for evaluating policy options and designed reforms leading to a fiscally sustainable system. By pairing local professionals with international specialists, the local professionals gained in-depth experience with effective practices employed around the world. SEGA also introduced and embedded modelling capabilities and actuarial techniques which enabled more refined analysis in evaluating policy options.

Specific technical assistance activities included the following:

  • Enhanced policy discussions through the development and use of modeling techniques to allow different parametric reforms to be quantified
  • Trained Ministry of Finance staff to be able to operate the developed models and analyze the outputs
  • Developed budgeting software to quantify the inputs used by the Ministry of Finance for medium-term expenditures
  • Developed long-term pension software to estimate the long-term fiscal requirements of Serbia’s pay-as-you-go system
  • Improved ability for policy-makers to consider alternative scenarios for reforming the pension system and evaluate alternatives. Specifically, the team helped develop replacement rate indicators that were consistent with international standards, helped differentiate statistics for the pension system from other social assistance statistics, and helped calculate proper wage statistics to be used in calculating pension benefits
  • Introduced private pension instruments to supplement the State pension system which is stimulating savings and helping citizens control their financial futures


As a result of Deloitte's technical assistance, the GoS strengthened its capacity to effectively design and implement pension reforms and pursue fiscal consolidation.  In addition, the quality of dialogue on pension reform and the issues surrounding the reforms improved.  The team's work helped build local capacity to continue reforming the pension system and supported efforts to promote continued fiscal viability.  The use of international specialists in the initial stages of the project helped promote consistency of Serbia's reforms with effective international practices while the transfer of knowledge and capabilities to local specialists facilitated ongoing analyses and helped Serbia take steps to keep reforms on track and achieve fiscal consolidation.

As used in this document, “Deloitte” means Deloitte Consulting LLP, which provides strategy, operations, technology, and human capital consulting services, Deloitte Financial Advisory Services LLP, which provides financial advisory services, and Deloitte & Touche LLP which provides governance and risk oversight and reporting advisory services. These entities are separate subsidiaries of Deloitte LLP. Please see for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

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