Spectator on facebook

Spectator on facebook

Second pension pillar faces changes

THE PRIVATE pension system in Slovakia is facing another change. After the government's repeated reopening of the second, private pillar to allow participants to return freely to the state-administered pension system, the fees charged to participants by pension fund management companies are now in the spotlight. Prime Minister Robert Fico says they are too high and wants them cut and tied to the gains achieved on pension savings.

THE PRIVATE pension system in Slovakia is facing another change. After the government's repeated reopening of the second, private pillar to allow participants to return freely to the state-administered pension system, the fees charged to participants by pension fund management companies are now in the spotlight. Prime Minister Robert Fico says they are too high and wants them cut and tied to the gains achieved on pension savings.

“Do you want fees?” Prime Minister Robert Fico asked rhetorically of pension management companies on February 25, as cited by the TASR newswire. “You will have them, if your funds are sufficiently profitable. If your funds aren’t sufficiently profitable and you continue depreciating people’s money, you will have no payments…and it’s even possible that the obligation – set by law – will appear to complete the funds to the level that people put in as principal.”

The prime minister is promising a significant reduction of the fees which can be charged by the pension fund management companies. The ministries of finance and labour as well as the Slovak central bank are working on draft legislation which will change them.

The private pension fund management companies, which have not yet seen any actual proposals and have not been invited to join in preparation of the legislative changes, have declared their willingness to discuss the fees.

“We are open to talking about everything that helps stabilise the pension scheme, but only at an expert level,” Ivan Barri, executive director of the Association of Pension Funds Management Companies (ADSS) told The Slovak Spectator. “All these steps, about which we now know only little, are partial and do not look at the system as a whole.”

Barri does not see linking the fees to yields as a productive approach.

“The pension fund management companies must pay to third parties some expenses which are linked with administration of assets, regardless of whether the funds report gains or losses,” said Barri.
The private pension fund management companies charge two types of fees to second pillar pension savers. The first one, charged for administration of the pension fund, equals 0.065 percent of the average monthly net value of assets in the fund. Participants also pay a fee equal to 1 percent of the monthly contribution they add to their private pension account. Six pension fund management companies offer services in Slovakia: Aegon DSS, Allianz-Slovenská DSS, AXA DSS, ČSOB DSS, ING DSS, and VÚB Generali DSS.

Assets in their funds exceeded €2.32 billion as of February 20. Of this amount, over €1.54 billion was in growth funds, €677.9 million in balanced funds and €101.2 million in conservative funds, ADDS reports.

Top stories

PyeongChang is Kuzmina's last Olympics Video

She has no plans for the Olympics in Beijing but she may compete in Tokyo.

Anastasiya Kuzmina rejoices with her husband Daniel after a mass start biathlon race.

Tax evasion still causes problems

The state adopts several measures to curb room for tax evasion, but the effect of some is questioned.

Many firms find taxes too complicated to handle themselves.

Police recommend that Bašternák faces charges

The Special Prosecutor’s Office will decide on further moves after examining the investigation file.

One of the protests against the practices of Bašternák (L on the banner) and his connections with the Smer Interior Minister Robert Kaliňák (R).

Migration activist flees Germany, Swedish attack ascribed to migrants

These are the hoaxes that appeared on the internet in the past two weeks.

The wide-spread news on a German migrant activist fleeing to Poland is a hoax.