Over 200 thousand citizens in Kosovo applied to withdraw ten percent from their pensions during the first day that country’s Pension Saving Trust enabled such an act, based on the newly adopted law on Economic Recovery.
By adopting the law on economic recovery on December 4, Kosovo’s government aims to boost the country’s economy hit by the COVID-19 pandemic.
This was one of the most controversial points which did not have the support by opposition, Democratic Party of Kosovo (PDK) and Vetevendosje.
However, after amendments proposed by PDK were included in the draft law, it had enough votes to be adopted.
Based on the amendment by PDK, those who have less than 10 thousand euros in the Trust will be reimbursed.
Kosovo Pension Savings Trust announced that despite some issues with the system, it worked well and citizens were able to apply online.
“Tens of thousands of applications were not processed because they had problems with bank account verification. This was not in our hands but we will find solutions. So for about 8 hours over 250 contributors certainly tried to apply and 218 thousand succeeded, the others had technical issues with bank accounts,” Kosovo Pension Saving Trust wrote in their announcement.
Before the law was adopted, the International Monetary Fund assessed that the withdrawal of funds from the Trust is not the right move.
“The proposed 10 per cent withdrawal of pension savings from the Kosovo Pension Saving Trust (KPST) undermines Pillar 2, reduces future pensions, and limits the size of the domestic capital market, which has been an essential source for budgetary financing,” reads the concluding statement of the 2020 Article IV Mission published on October.