The opposition Slovak Democratic and Christian Union (SDKÚ) says it will turn to Slovakia's newly-established Council for Budgetary Responsibility over the government-sponsored amendment to the Social Insurance Act if the new legislation is passed in parliament in its current form, party vice-chairman Ivan Štefanec said on Thursday, August 9.
"I'm convinced that this law will make public finances and the entire pension system less sustainable," said Štefanec, as reported by the TASR newswire.
The setting up of the Council for Budgetary Responsibility, also known as the fiscal council, was approved in late 2011. Former Slovak central bank (NBS) governor Ivan Šramko was appointed head of the body in June 2012.
The governing Smer party is seeking to cut payroll deductions to the second (capitalisation) pillar of the pension system from 9 to 4 percent, with the first (state-run) pillar receiving the diverted money instead. Funds paid into the second pillar go into individual pension savings accounts, whereas funds paid into the first pillar go into a general government account in return for a promise to savers that the state will pay them a pension upon retirement. According to Štefanec, the SDKÚ plans to submit an amending proposal whereby the status quo will be preserved. Such an initiative is also being backed by fellow opposition parties, he said.
The Sme daily wrote in its Friday, August 10, issue that Prime Minister Robert Fico has launched a campaign against the second pillar. Fico asserted during the question time in parliament on Thursday that the second pension pillar is neither attractive nor profitable for people with a monthly income under €1,000 a month. However, experts told Sme that the profitability of the second pillar does not depend merely on the amount of contributions, but also on the age of the saver and the number of years of employment or work. Vladimir Balaz of the Slovak Academy of Sciences said that those who have already entered the second pillar should stay there.
Changes planned by the government to the second pension pillar are nothing but an economic crime, Freedom and Solidarity (SaS) chairman Richard Sulík said during the parliamentary debate. Sulík's view was also shared by another party colleague, Peter Osuský. However, the opposition was not united, as Ordinary People and Independent Personalities (OĽaNO) leader Igor Matovič took potshots at Sulík during the debate, criticising the SaS chairman for allowing Fico to make his comeback to power, TASR wrote.
Sources: TASR, Sme
Compiled by Zuzana Vilikovská from press reports
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.
10. Aug 2012 at 10:00