Valorisation mechanism changes

But not everybody is satisfied with some of the latest changes.

The system of calculating pensions will change.The system of calculating pensions will change. (Source: SME)

Retirees in Slovakia should no longer experience situations where their pension increases by only several percents. The Labour Ministry is changing the valorisation system, introducing so-called retirement inflation.

SkryťTurn off ads
Article continues after video advertisement
SkryťTurn off ads
Article continues after video advertisement

This fact fulfils the promise of the ministry’s 2012 pension reform whose aim was to improve the sustainability of public finances. But what is new is the proposal of guaranteeing a minimum valorisation, with which the ministry plans to secure the increase in pensions under unfavourable economic situations as well.

SkryťTurn off ads

Yet, critics point to the risks that may arise from the proposal.

Read also: Women receive lower pensions Read more 

“We consider the proposal a non-systemic interference into the pension system parameters with a negative impact on the long-term sustainability of public finances,” Marek Porubský and Viktor Novysedlák from the Council for Budgetary Responsibility wrote in an analysis.

Valorisation changes

Altogether 1,055,168 people received old age pension in September 2017. The average sum amounted to €427.80 on average, according to the data of the state-run social insurer Sociálna Poisťovňa.

Between 2013 and 2017, the country changed the model from the so-called Swiss mechanism, which combined the increase of the average wage and consumer prices, to retirement inflation.

In the transition period, pensions were valorised by a fixed amount dependent on increases in consumer prices and the average wage. Since in 2015 and 2016 consumer prices decreased and pensions rose only minimally, the state decided to increase pensions by 2 percent of the average pension in 2017, Labour Ministry’s spokesperson Michal Stužka explained.

SkryťTurn off ads

As of 2018, pensions will increase by only using the retirement inflation. Moreover, for 2018-2021 the ministry proposes guaranteeing a minimum valorisation, amounting to 2 percent of the average pension for the same period.

The rest of this article is premium content at Spectator.sk
Subscribe now for full access

I already have subscription - Sign in

Subscription provides you with:
  • Immediate access to all locked articles (premium content) on Spectator.sk
  • Special weekly news summary + an audio recording with a weekly news summary to listen to at your convenience (received on a weekly basis directly to your e-mail)
  • PDF version of the latest issue of our newspaper, The Slovak Spectator, emailed directly to you
  • Access to all premium content on Sme.sk and Korzar.sk

Top stories

Two bear incidents over weekend, an effort to revive Bratislava calvary, and storks in Trnava.


Píšem or pišám?

"Do ľava," (to the left) I yelled, "Nie, do prava" (no, to the right), I gasped. "Dolšie," I screamed. "Nie, nie, horšie..." My Slovak girlfriend collapsed in laughter. Was it something I said?


Matthew J. Reynolds
Czech biochemist Jan Konvalinka.

Jan Konvalinka was expecting a pandemic before Covid-19 came along.


SkryťClose ad