SLOVAKIA’S pension system is to change for the 21st time after MPs passed a draft amendment to the law on pension savings on September 14, the TASR newswire reported.
The new legislation prepared by the Labour Ministry under Jozef Mihál will bring several changes, including an increase in the number of pension funds, fewer guarantees, and the automatic enrolment of young people into the private second pension pillar. The latter will then have the opportunity to decide whether they want to leave within two years.
At the moment, there are three pension funds – conservative, balanced and growth. As of the beginning of next year, the ministry will change the names of the existing funds to bond, mixed and share funds. Moreover, the ministry plans to establish a new, indexed fund which will track the changes in stock indexes selected by pension fund management companies (DSS). The guaranteed returns currently required by the law will be abolished for all existing funds except the bond fund.
“We are trying to protect the interests of savers, and their interest is in getting the highest profit,” Mihál said, as quoted by TASR, adding that savers should get the highest possible pension when they decide to retire.
Parliament also approved several MPs’ comments to the amendment, including a suggestion by Július Brocka to shorten the minimum period of saving by five to 10 years, and a proposal by Ľudovít Kaník to let DSS invest in precious metals.
