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Capitalization pension pillar draws thousands of new savers

From the first quarter of 2005, when the capitalization pillar for old-age pension saving started operating, until the end of last year, a total of 33,400 people joined the capitalization pillar of the pension scheme. The total number of savers reached over 1.56 million by the end of last year.

From the first quarter of 2005, when the capitalization pillar for old-age pension saving started operating, until the end of last year, a total of 33,400 people joined the capitalization pillar of the pension scheme. The total number of savers reached over 1.56 million by the end of last year.

Of the total number of compulsory savers, social security provider Sociálna Poisťovňa selected a pension fund management company for over 18,200 people. These are savers who did not sign contracts with any of the six licensed pension-fund management companies operating in Slovakia within thirty days; due to the applicable law they were obliged to enter the second pillar of the pension scheme as compulsory pension savers, said Lýdia Výborná, head of the communications department of Sociálna Poisťovňa.

As of the beginning of this year, participation in the second pension pillar became voluntary for young people born after December 31, 1986. The

young people got the option to decide whether to join the capitalization pension pillar or not. They are required to make this decision within six months of starting their first job. The amendment to the social insurance law, in effect from the beginning of this year, enables citizens, who did not enter the capitalization pillar by the end of June 2006, to join the pillar from January 1 to June 30 of this year. In the same period, the current savers of the capitalization pillar have the opportunity to return from the second pension saving pillar in the two-pillar system to the exclusively pay-as-you-go financed system administered by the state-run Sociálna Poisťovňa. SITA

Compiled by Zuzana Vilikovská from press reports

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