Do People Save Enough for Tomorrow? The Comparative Study on Western Balkans

Due to the increase in life expectancy and the decline in the birth rate, which has an impact on the increase in the proportion of the older population, there is a need to develop a rational pension strategy. This is a behavioral economic analysis of voluntary pension funds in the Western Balkans. The main goal of the research is to determine whether fund users behave according to the well-known Richard Thaler model or have a specific pattern of behavior. According to Thaler’s model, people make financial decisions with limited rationality. They are impatient and short-sighted, which is why they focus on the present rather than the future. Younger employees mainly opt for actions that give them immediate gratification rather than planning for the future. More money flows into pension funds when people are approaching retirement, not when they are in their best working and financial position. Another peculiarity of the Western Balkans is that they have gone through a long period of transition, a period of instability, and that long-term savings were not on the agenda for the average family. The paper is based on a hypothesis that should determine whether users of voluntary pension funds in Western Balkans countries (Serbia, North Macedonia, Montenegro) increase a portion of their salary savings as they approach the retirement period. Analysing the content of the statistical reports collected in the pension funds was used as a method of data collection. A regression analysis was performed to examine the established model. Model creation and calculations were performed in IBM Amos 25 and SPSS 25. A significance level was set to α=0.05 (Hair et al., 2019). The results for Serbia, showed significant values for all three R coefficients. R square values were taken into account. Based on the results, the predictor variable (number of users by age) has significantly explained the variability of “amounts of accumulated funds by age” in all three countries of the Western Balkans. The fund users in all three countries behave similarly, paying significantly higher amounts into the fund after the age of forty. Beneficiaries aged between 20 and 39, members of a very productive labour cohort, pay lower, often symbolic amounts into the pension funds. We are talking about relatively young funds in their infancy, which are unstable or insufficiently stable. A more stable and efficient structure can be observed in the case of Serbian voluntary pension funds.