San Marino, one of the world's smallest and oldest republics, stands as a unique case in the European retirement landscape. Despite its size, San Marino boasts a comprehensive and robust pension insurance system rooted in social solidarity and financial sustainability. In 2025, the Sammarinese pension framework reflects both traditional values and modern reforms aligned with European best practices. This article provides an in-depth exploration of the pension insurance system in San Marino, its structure, contribution rules, benefit calculations, and future challenges.
The Structure of San Marino’s Pension System
San Marino’s retirement framework follows a two-pillar system:
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First Pillar – A mandatory public pension system, funded by contributions from workers and employers.
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Second Pillar – Supplementary pension schemes, encouraged for long-term savings.
Unlike many EU countries, San Marino does not yet operate a third pillar with significant private pension activity, though voluntary individual savings are promoted.
Administration and Legal Framework
The pension system is managed by:
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Istituto per la Sicurezza Sociale (ISS) – The Institute for Social Security.
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Operates under the authority of the Secretariat of State for Health and Social Security.
Laws governing pensions include the Law no. 168/1989, with amendments introduced to reflect demographic and economic changes.
First Pillar: The Public Pension System
The public pension in San Marino is a defined benefit system, financed on a pay-as-you-go basis.
Coverage:
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Mandatory for all employees, self-employed, and public sector workers.
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Foreign workers legally employed in San Marino are also covered.
Contribution Rates (2025):
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Total: 24.5% of gross income
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16.5% by the employer
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8% by the employee
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Self-employed pay the full contribution themselves.
Minimum Contribution Period:
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At least 15 years to qualify for a retirement pension.
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Full pension rights are obtained after 40 years of contributions.
Retirement Age and Eligibility
Statutory Retirement Age:
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67 years for both men and women as of 2025.
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Early retirement possible from age 62, with a reduction penalty of approximately 5% per early year.
Flexibility:
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Postponing retirement beyond 67 increases pension benefits.
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Partial retirement is allowed, combining part-time work with a partial pension.
Pension Calculation
The public pension is calculated based on:
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Number of contribution years.
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Average income over the insured career.
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Revaluation coefficients set annually by the government.
Replacement Rate:
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The pension can replace up to 70–75% of average career income for full-contribution workers.
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Early retirees receive reduced benefits due to shorter contribution periods and actuarial reductions.
Minimum Pension:
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Guaranteed minimum pension of approximately €800/month in 2025.
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Indexed to inflation and periodically reviewed by the government.
Indexation and Inflation Adjustment
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Pensions are adjusted annually based on the consumer price index (CPI).
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Recent reforms also introduced sustainability measures, allowing for flexible indexation in case of economic stress.
Disability and Survivor Pensions
Disability Pension:
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Granted to individuals deemed permanently incapacitated for work.
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Requires at least 5 years of contributions, or less if due to work injury.
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Pension amount depends on age, contribution period, and degree of disability.
Survivor’s Pension:
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Available to spouses, children, or dependent family members of the deceased insured.
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Typically 60% of the deceased's pension, with additional benefits for dependent children.
Self-Employed and Freelancers
San Marino includes self-employed persons in its pension scheme:
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They must register and pay contributions to the ISS.
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Contributions are calculated based on declared income, subject to a minimum threshold.
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Benefits are proportional to contributions, so self-employed individuals are advised to contribute consistently and plan for supplementary savings.
Supplementary Pensions (Second Pillar)
The second pillar in San Marino is voluntary, but gaining traction.
Key Features:
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Employers can establish company-based pension funds.
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Employees may contribute voluntarily, with or without employer match.
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Funds are regulated by the Central Bank of San Marino to ensure transparency and security.
Tax Benefits:
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Contributions are tax-deductible up to set annual limits.
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Investment gains are tax-exempt until retirement.
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Upon retirement, beneficiaries can opt for lump-sum withdrawal or monthly annuities.
International Coordination
Bilateral Agreements:
San Marino has signed social security agreements with countries like:
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Italy
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Argentina
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Belgium
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Luxembourg
These treaties allow workers to aggregate contribution periods and receive pensions across borders.
EU Integration:
Although not an EU member, San Marino aligns many social security policies with the EU and benefits from mobility agreements that facilitate coordination for cross-border workers.
Digital Access and Pension Services
In 2025, San Marino continues digitalizing public services:
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Online portals allow users to:
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Check contribution records.
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Submit pension applications.
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Simulate retirement income.
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Personalized pension projections are provided by the ISS upon request.
Public Reforms and Policy Direction
The government of San Marino has prioritized pension sustainability through:
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Raising retirement age progressively in line with life expectancy.
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Indexing contributions and benefits to economic realities.
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Encouraging supplementary pension schemes through tax incentives.
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Combating informal employment, which undermines contribution levels.
Challenges and Opportunities
Challenges:
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Aging population – Over 20% of the population is over 65.
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Limited labor force – Small economy with a narrow base of contributors.
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Cross-border workers – Require complex coordination with neighboring Italy.
Opportunities:
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Digital tools enhance transparency and accessibility.
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Growing second-pillar adoption helps diversify retirement income.
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Public trust in the ISS remains strong due to transparent management.
Retirement for Foreign Nationals in San Marino
Foreigners working legally in San Marino:
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Must contribute to the national pension system.
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Are eligible for pension benefits under the same rules.
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Can export pensions to their country of residence under international agreements.
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Some retirees from Italy and other EU countries choose San Marino for its stable economy, safety, and high standard of living.
Conclusion
San Marino’s pension system, while modest in scale, reflects a strong commitment to social solidarity and fiscal prudence. With a universal first-pillar framework and growing support for supplementary pensions, the country is well-positioned to support its retirees in 2025 and beyond. For workers, whether employed or self-employed, the keys to retirement security in San Marino lie in consistent contributions, awareness of eligibility rules, and smart engagement with both pillars of the system.