The Slovenia Times

Pension reform

Govt Adopts Pension Reform Bill

10.09.2010

By STA

The government adopted on Thursday a pension reform bill that will tighten retirement conditions in Slovenia in a bid to shore up the pension purse which faces rising expenditure due to population ageing.

Prime Minister Borut Pahor and Minister of Labour, Family and Social Affairs Ivan Svetlik hailed the decision to reform the 2000 pension and disability insurance act. Pahor said this was a key piece of the government's reforms.
Svetlik said the bill envisages the raising of the full retirement age to 65 years for both men and women. The age will be increased from the current 61 years by six month increments each year from 2021 to 2026.
Those retiring at 65 years will have to have at least 15 years of service for a full age-based pension.
According to Svetlik, men will be able to retire at 60 and women at 58 if they started working young. To meet this condition men will have to have 43 years of service, while women will have to have 41 years.
These conditions will be introduced in 2014 for men and 2016 for women.
Moreover, early retirement, though with penalties, will also be possible at the age of 60 under the condition of 40 years of service for men and 38 years of service for women, Svetlik told reporters after the government session.
The bill envisages a special bonus for parents, under which those retiring would be able to claim an 8-month reduction in the conditions for retirement for each child, but only up to a maximum of two years.
The proposal also includes a system of deductions for those who want to retire before they are entitled to a full pension and bonuses for those who keep working after they have met retirement conditions.
The bill proposes an increase in the period taken into account in calculating a person's pension. Currently, only the highest-paid 18 years are factored in, but this will be gradually extended to 34 years if the proposal is made into law.
The bill has been adopted despite opposition from the trade unions, who are staunchly opposed to proposals to raise the retirement age to 65 and the required years of service for a full pension.
Saying that the government had no more time to waste, Pahor said it had to take it upon itself to push ahead with the reform, while allowing for trade unions to contribute constructively to the debate as the bill makes its rounds in parliament.
While the trade unions have threatened to respond to the reform by calling a referendum on the motion, the proposal enjoys the support of business.
The Chamber of Commerce and Industry (GZS) pointed out today that pension spending is expected to rise from 11.2% of GDP in 2020 to 18.4% in 2050 due to population ageing. "Slovenia needs reform that will provide for financial sustainability of the pension purse."
Having finalised pension reform, the government will now focus on health reform, Pahor said today. The prime minister expects that the government will finalise the relevant legislation in health by early next year.