"Social insurance in the Republic of Serbia consists of three main components: pension and disability insurance; health insurance; and unemployment insurance. Pension and disability insurance includes both mandatory and voluntary schemes. Mandatory pension and disability insurance is based on the pay-as-you-go financing model, where pensions are funded through contributions made by the current generation of workers. This mandatory insurance provides coverage for various risks including old age, disability, death and bodily injury. Individuals covered by this system include employees, self-employed individuals and agricultural workers. Nevertheless, the average pension remains well below 50% of the average gross wage in Serbia, raising concerns about pensioners' standard of living. The authors propose the introduction of an extraordinary pension adjustment mechanism, triggered in cases where the average pension falls below 50% of the national gross average wage, as a means of improving the adequacy of pensions and preserving the dignity and financial security of the retired population."

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