The Labour, Social Affairs and the Family Ministry on February 8 submitted an amendment to the Old-Age Pension Savings Act - a move taken in response to reservations expressed by the European Commission (EC) towards certain investment restrictions applied to pension funds in the so-called private, second pillar of the pension system, the TASR newswire wrote.
“The criticised shortcomings have been corrected and the discriminatory factors removed by the proposed changes, which loosen investment conditions, as well as create wider scope for investments outside the eurozone,” reads the document submitted by the ministry for comments.
The EC had expressed its reservations towards regulations that currently give the Slovak central bank (NBS) power to restrict a private pension fund to investing only up to 50 percent of the value of its net assets in securities issued or guaranteed by eurozone-member states. According to the EC, such a regulation is at odds with EU legislation, especially in terms of the free movement of capital.
The proposed amendment broadens the investment options vis-a-vis the securities of all EU-member states, including those in which the euro is not the legal tender, to 50 percent. The current limit for investments in countries without the euro is 20 percent. In order to reduce investment risk, the amendment introduces a condition that negotiable securities should be denominated in the same currency in which the value of pension fund is expressed.
The EC's requirement was communicated on January 28 in the form of a so-called reasoned opinion, which represents the second phase of infringement proceedings, TASR wrote. According to the EC, the current version of the law, which was criticised by EC for the first time in June 2008, allows relevant state bodies to discriminate against investments in securities issued or guaranteed by EU-members states that do not belong to the eurozone. TASR
Compiled by Zuzana Vilikovská from press reports
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9. Feb 2010 at 10:00