Economists warn against spending money from re-opened second pillar

Ten renowned local economists issued a joint statement criticising the government's plan to reopen the second pillar of pension saving. They suggest that the government's campaign for the capitalisation pillar will destabilise the pension system and its result will not be the desired protection of future pensions but spending funds destined for their payment. The economists say that the government thus should not spend the money it plans to acquire in the opening of the second pillar. The economists recommend that MPs change the Cabinet-approved budget draft for 2009 so that it does not count on revenues acquired from the savings of people who decide to quit the second pillar.

Ten renowned local economists issued a joint statement criticising the government's plan to reopen the second pillar of pension saving. They suggest that the government's campaign for the capitalisation pillar will destabilise the pension system and its result will not be the desired protection of future pensions but spending funds destined for their payment. The economists say that the government thus should not spend the money it plans to acquire in the opening of the second pillar. The economists recommend that MPs change the Cabinet-approved budget draft for 2009 so that it does not count on revenues acquired from the savings of people who decide to quit the second pillar.

Economists from INEKO, HPI, the F.A. Hayek Foundation and other independent think-tanks and institutions explain that the creation of the second pension pillar was intended to diversify sources for financing of future pensions between the local market and global financial markets, thus increasing Slovakia's chances of successfully coping with the aging of the population. The second pillar was to boost the security of the pension system in the long run, they said. SITA

Compiled by Zuzana Vilikovská from press reports
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