Pension reform to start in January

THE LABOUR Ministry estimates 28 percent of wage earners will transfer part of their current old-age pension insurance contributions to private pension fund management companies, in the second half of next year, according to the SITA news agency.

From January to June next year, 12 percent of the working population are expected to join private pension fund schemes, according to the ministry, bringing a total of 40 percent of Slovak citizens into the private pension sector by the end of 2005.

An additional 10 percent of economically active people are also expected to join them in the first two months of 2006.

Although most citizens will have time until June 2006 to decide whether they will voluntarily join the pension savings system, the ministry does not anticipate the share of savers to increase between March 2006 and June 2006.

Old-age pension savings, within the framework of the second capitalisation pillar, will be launched from January 2005, when citizens will be able to start depositing a part of their present contributions to old-age pension insurance, amounting to nine percent of their gross salary, to their personal account in a pension fund management company.

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