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Kaník: PM misleading public over reformed pension system

The Sporiteľ (Saver) civic association said on August 8 that Prime Minister Fico's criticism of private pension-fund management companies (DSSs)from the previous day was an attempt to mislead and manipulate the public with the aim of destroying the second pillar of the pension system.

According to its senior representative Ľudovít Kaník - a former social affairs minister and architect of the pension-system reform - Fico's claim that savings deposited in DSSs are in danger due to their balance-sheet losses can be considered misleading. The earnings of DSSs are governed by law and are separate from client deposits.

Kaník added that the claim that the state did not guarantee contingent losses in full was absolute nonsense, because this sphere was also covered by law. He rejected the claim that the existence of the second capitalization pillar of the system was causing state pensions provider Sociálna Poisťovňa to produce a deficit, as the deficit existed long before the pension reforms were introduced.

"What is necessary is changes and adjustments to the first (state) pension
pillar, which is not sustainable in the long term. The second pillar is healthy, functioning, and able to provide people with secure pensions," Kaník added.

Slovakia's central bank (NBS) governor Ivan Šramko said on August 8 following the Government session that the private pension system in Slovakia was safe, based on multiple controls, with savers' money strictly separated from the pension companies' own assets.

According to him, the losses that the companies have posted so far can be explained by the fact that the whole system has only just been launched. Some of the companies used legal accounting techniques to include all the initial costs in one year. "These are the ones that posted the biggest losses," Sramko said, adding that companies that spread the costs over longer periods conversely posted smaller losses.

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