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Fico defends proposed changes to second pension pillar

People saving for their retirement in the second, so-called capitalisation, pillar of Slovakia’s old-age pension system will receive about 18 percent less than those in the first pillar in 2012, according to Prime Minister Robert Fico, who summoned a press conference following the end of a special cabinet session to discuss the issue, the TASR newswire reported.

People saving for their retirement in the second, so-called capitalisation, pillar of Slovakia’s old-age pension system will receive about 18 percent less than those in the first pillar in 2012, according to Prime Minister Robert Fico, who summoned a press conference following the end of a special cabinet session to discuss the issue, the TASR newswire reported.

Fico claimed that nobody criticises the fact that even this figure is very optimistic, as it implies that the second-pillar pension fund management companies (DSS) have achieved returns of at least the same rate as inflation.

“This is not true, however, as the DSS are appreciating [savings] well below inflation,” said Fico, as quoted by TASR, adding that obviously the opposition wants people to “receive one-fifth lower pensions”.

We believe that this system is very dangerous for savers, Fico stressed. He added that this is the reason why the government wants to set up different parameters and guarantees.

Moreover, he asserted, the second pillar has fallen 12 percent behind inflation when compared to the period in which it was launched. At the same time, the pensions of people in the first pillar have increased by 16.62 percent, TASR wrote.

Despite this, Fico said, Slovakia will still have the highest level of deductions for the second pillar even after the percentage taken from salaries is reduced from 9 percent to 4 percent, as proposed by the government.

Source: TASR

Compiled by Radka Minarechová from press reports
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