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PM Fico dissatisfied with second pension pillar, it should be opened again

Since January 1, the first pensions paid from the second, voluntary and private, pension pillar have been offered to savers who fulfil certain conditions. However, they are very low and Prime Minister Robert Fico announced that during this week, his government will present a solution to the situation.

Since January 1, the first pensions paid from the second, voluntary and private, pension pillar have been offered to savers who fulfil certain conditions. However, they are very low and Prime Minister Robert Fico announced that during this week, his government will present a solution to the situation.

Fico and his ruling Smer party have been against the second pillar from its very beginning, changing its rules constantly, thus forcing the pension-saving companies to invest more cautiously which, in turn, made returns lower, the Sme daily wrote.

At a press conference on January 16, Fico said that the scheme has proven to be disadvantageous for older people and those with lower incomes. Labour, Family and Social Affairs Minister Ján Richter, too, demonstrated the reluctance and negative stance of Smer towards the second pillar.

Ten years of its existence have shown that the second pillar, in which about 1.5 million Slovaks have saved approximately €6.4 billion, is ineffective, the Pravda daily wrote, adding that the government and the premier have announced changes. The savings are not expected to be confiscated (i.e. nationalised) but rather, the pillar is expected to be opened for the fourth time in history for those dissatisfied and feeling tricked to have opportunity to leave it.

“What has happened with the payment of the first 3,000 pensions [from the second pillar at the beginning of this year] has absolutely proven our objections,” Fico said, as quoted by the TASR newswire. He went on to say that his cabinet will now have to adopt “categorical measures” to salvage the situation, to be announced in the week beginning on January 19.

Richter said that the current situation concerning low payments for the first group of retired people to receive pensions from the second private pillar is a result of a “massive campaign” sponsored by rightist politicians. He added that he spoke about the current situation with representatives of insurance companies and pension fund management companies, along with the Slovak central bank (NBS) and officials of the Finance Ministry. The Labour Ministry should announce the outcomes of the negotiations within two weeks.

(Source: Sme, Pravda, TASR)
Compiled by Zuzana Vilikovská from press reports
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