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Cabinet postpones debate on second pillar

The cabinet is waiting for a report on the legal aspects of lowering payments to the second pillar of pension savings in private pension fund management companies before it discusses the potential changes, the SITA newswire wrote.

Cabinet was to debate a document that analyzed the effects of second pillar introduction on the economic performance of the Sociálna Poisťovňa social security provider on April 4. They postponed the debate because the analysis was not completed in time, said Labour Minister Viera Tomanová.

While it is currently unlikely that payments to the second pillar would be cut from the current nine percent to six percent of a saver's gross wage, an analysis of the legal impact of such a reduction is still necessary, explained the minister.

Tomanová emphasized that public resources cannot flow to private pension management companies. She said she believes public resources must be used for public expenditures. As an example, she spoke of parents on maternity leave who receive pension insurance dues from the state.

However, the ministry will push for voluntary entry to the second pillar for young people who are entering the labour market for the first time, and will also give people the opportunity to quit the private pension saving system if the second pillar does not benefit them.

The minister said cabinet should adopt concrete measures to the pension system by the end of September, to give lawmakers time to approve the necessary legislation by the end of this year. The minister pledged that she would only propose measures that would not have a negative impact on Slovakia's citizens.

Earlier in the week, the Labor Ministry introduced a document that analyzed the impact of capitalization pension pillar introduction on the performance of Sociálna Poisťovňa, and offered measures that would lead to the stabilization of its budget.

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