The Labor Ministry has failed in an attempt to cancel some of the fees pension fund management companies charge savers for investing their pension savings in the shares of open-ended mutual funds and securities issued by foreign entities.
As part of an interdepartmental review on the draft revision to the retirement pension savings law, the central bank stated that pension fund management companies (DSS) might avoid this type of investing, which might eventually cause lower yields in the second pension pillar and thus harm clients. The ministry accepted this view. DSS will thus be able to keep charging fees for fund management of savings invested in these financial instruments. "This would be a non-systemic step, giving rise to the risk that a pension fund management company would not primarily act in the best interest of savers and pension beneficiaries when deciding on investment strategy, but would opt for investment instruments whose value is added to the volume of assets for calculation of a fee for managing a pension fund," the National Bank of Slovakia (NBS) advised Labour Minister Viera Tomanová.
The Labour Ministry also wants to allow savers in the second pension pillar to change their DSS once a year without charge from next year. Savers would pay Sk482 (€16) if they switch to another DSS sooner. The ministry accepted the Finance Ministry's request to enable savers to change DSS for free after a certain period. At present, pension savers have the option to change their DSS once every two years and must pay Sk500 (€16.60) to the social insurance provider Sociálna Poisťovňa for the change. SITA
Compiled by Zuzana Vilikovská from press reports
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.
6. Aug 2008 at 18:00