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Gov't to alter pension second pillar for fourth time

THE GOVERNMENT will alter the second, private savings, pillar of the country’s pensions scheme for the fourth time, said Prime Minister Robert Fico, as most people should not even be opting for this option.

“Nearly 1 million people who currently invest in second pillar will not have higher pension they would have if they were in the [state-run social insurer] Sociálna Poisťovňa,” Fico said, as quoted by the TASR newswire, adding that the best way to give people possibility to decide what to do is to reopen the second pillar and allow them to return only to the pay-as-you-go state pillar.

This should apply mostly to people without assessment basis who have zero on their accounts, or are even in minus, Fico said. He added that people whose incomes are lower than the average wage in national economy will not have higher combined pension from the first and second pillar than they would receive if they were only in the first pillar, as reported by TASR. He also said that the second pillar is disadvantageous for older clients.

“We have relatively large group of people in the age who are not able to save for higher pension, as we could he in past weeks when 3,000 people started to claim for their pensions from second pillar,” Fico added.

The PM accused the right-wing parties of damaging the system with their “wild reforms”, as reported by TASR. He added that if the government did not reduce the contribution to the second pillar from 9 to 4 percent, the losses of clients would be bigger.

Labour Minister Ján Richter will now discuss the details with other relevant institutions, including the pension fund management companies and the National Bank of Slovakia. He will specify the measures only after the end of negotiations, Fico said, as reported by the SITA newswire. The parliament should pass the amendment in fast-tracked proceeding on upcoming session which starts on January 27, he said.

According to Ľudovít Kaník of the Slovak Democratic and Christian Union (SDKÚ), the government will open the pillar because it wants access people’s savings.

“It wants to finance its so-called social packages through which it wants to buy voters,” Kaník said, as quoted by SITA.

Július Brocka of the Christian Democratic Movement (KDH) said that it is Fico and his Smer party that should be first and foremost held accountable for the current situation involving the second pillar.

According to Daniel Lipšic of NOVA, who was also part of the government that introduced the second pillar, it is not a mere invention of reformers, but a demographic necessity.

“Our message to Robert Fico is that he should not be playing with the future of people younger than 50 years of age,” he said, as quoted by TASR.

Source: TASR, SITA

Compiled by Radka Minarechová from press reports

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