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Opposition criticises rules for drawing the savings from pension funds

The amendment to the law on old-age pensions-saving which made it to the second reading in parliament on March 19 stipulates the rules for drawing the savings.

The amendment to the law on old-age pensions-saving which made it to the second reading in parliament on March 19 stipulates the rules for drawing the savings.

Most people who save for their old-age pensions in the second, private pillar will have to buy a life-long pension through a life-insurance company. The so-called programme withdrawal option, which allows the saver to gradually withdraw accumulated amounts after retiring, will only be possible for those whose first-pillar pension or the combined first and second-pillar pension is more than four times the sum of the living wage, which currently comes to about €800. This will however only apply to a small number of pensioners, the SITA newswire wrote.

The second group of people who will be allowed to draw the saved amount, are savers who will not be offered to have their life-long pensions paid gradually by insurance companies. The pension administering company will pay the savings to a small group of savers through the programme withdrawal – but the heirs will inherit the unpaid sum. This will not be the case for the so-called temporary pensions (paid by life-insurer) which will be paid to the saver within five, seven or 10 years. However, if they die in this period, the money will be left with the insurance company.

Most-Híd Vice Chairman Ivan Švejna deems this amendment the worst yet prepared by Labour Minister Ján Richter. Christian Democratic Movement (KDH) MP Július Brocka opines that the legislation is well-prepared; and Slovak Democratic and Christian Union’s (SDKÚ) MP Ľudovít Kaník is satisfied with the philosophy, but dislikes the amount that savers have to collect to be eligible to withdraw their pensions from the second pillar. Freedom-and-Solidarity (SaS) MP and former Labour Minister Jozef Mihál criticised the amendment, according to SITA, for the too high amount, claiming that the limit of €800 can be reached only thanks to previous income amounting to €1,600 per month – which is the reality for 2 to 5 percent of savers.

(Source: SITA)
Compiled by Zuzana Vilikovská from press reports
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.

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