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Todorovicˇ
Consequences of the new law’s application include the following: • Pillar I pension expenditures decreased from about 13 percent of gross domestic product (GDP) before the reform to 9.4 percent in 2006. • The contribution base increased from 51.5 percent of overall income in 2003 to 67.7 percent in 2006 as a consequence of a higher employment rate and a decrease in “gray” economy activity. • The annual number of new pension beneficiaries, especially new disability pensioners, has shown a negative trend. In December 2006 the parliament adopted the Law on Voluntary Pension Funds (pillar III), effective from July 1, 2007. These pension funds will contribute to the new quality of the capital market and of investments and, via a system of voluntary insurance, will provide a higher degree of material and social security for the elderly than provided by mandatory insurance alone. Also, thanks to the implementation of a multipillar pension system, the future obligations of the state toward mandatory public insurance will diminish. The government of Montenegro adopted the national employment strategy for the 2007–10 period with the aim of reforming the labor market in line with the European Union (EU) association process. Priority goals are • Growth in employment of 2.5–3.0 percent per year (0.5 percentage point more than in 2003–6) • Decrease in the unemployment rate to 8–10 percent (from 14.7 percent in 2006) • Decrease in work and employment on the black market. (It is estimated that between 25,000 and 30,000 people are engaged in such activities.) To stimulate employment of those who experience special difficulties in finding a job (disabled persons, people who have been on the list of the State Employment Service for more than five years, persons whose skills have been made obsolete by transition, and so forth), the government in April 2006 adopted a regulation on tax incentives for employment of certain categories of unemployed persons. This regulation also encourages seasonal employment and employment in public works.