NEWS IN SHORT

MPs debate pensions and deposits

BILLS re-opening of the second, capitalisation pension pillar, and enhancing protection of deposits in Slovak banks are high on the agenda of the ongoing parliamentary session. Parliament is dealing with both bills in a shortened legislative dealing, meaning that they should be approved during the current session, the SITA newswire wrote.

BILLS re-opening of the second, capitalisation pension pillar, and enhancing protection of deposits in Slovak banks are high on the agenda of the ongoing parliamentary session. Parliament is dealing with both bills in a shortened legislative dealing, meaning that they should be approved during the current session, the SITA newswire wrote.

On October 22, parliament advanced both bills to their second readings.

The draft bill on the second pension pillar will enable people saving for their pensions with private pension funds to quit them and return to the pay-as-you-go pension scheme managed by the state social security provider Sociálna Poisťovňa from November 15 until the end of next June.



The Fico government has said it wants to reopen the second pension pillar because it is concerned about the potential effect of the global financial crisis on markets where pension fund management companies invest.

It estimates that between 30,000 and 150,000 policyholders will quit the second pension pillar, and that between 5,000 and 20,000 people will take the opportunity to join it.

The proposal has attracted criticism from opposition parties. Zoltán Horváth, an MP for the largest opposition party, the Slovak Democratic and Christian Union (SDKÚ), thinks that the cabinet is committing what he called “the biggest theft” from citizens of Slovakia.

He said that the cabinet is already counting on the use of Sk7 billion (€232 million) in next year's budget which it plans to obtain as a result of people returning to the state-run pension pillar.

"The government will chase people away from the second pillar and spend their money to buy votes," he said according to SITA.

The proposed law guaranteeing unlimited protection of citizens' savings deposited in banks will replace existing legislation which provides 90-percent cover up to a maximum of €20,000 in the event of a bank’s failure.

It will not cover deposits in branches of foreign banks which operate in Slovakia under a single EU banking licence.


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