BRATISLAVA, September 7, (WEBNOVINY) — According to a proposal by the ruling coalition KDH MP Julius Brocka supported by the Parliamentary Committee on Social Affairs on Wednesday, the minimum period for saving in the second pension pillar will be shortened from current 15 to 10 years. Brocka emphasized that some savers entered the system expecting that they will be eligible to a pension from the second pillar after ten years of saving. “In the meantime, this condition changed from ten to fifteen years,” comments Brocka on changes to pension saving system introduced by the government of Robert Fico. “With this petty change this group of savers suddenly found itself in a kind of vacuum. They can reach their pension age but would not be eligible to drawing their pension from the second pillar,” underlined Brocka.
Minister of Labor and Social Affairs Jozef Mihal supported Brocka’s proposal for changes. “We are considering changing the required period of saving and are even considering abolishing it completely,” informed Mihal. According to him, his ministry planned incorporating such proposal into the next amendment dealing with retirement pension legislation which should define the rules for calculating pensions from the second pillar. “This proposal is very rational, it comes before we could introduce our intentions, the minister commented on Brocka’s draft.”
From April 1, 2012, guarantees in all pension funds but the conservative fund are to be abolished. The existing conservative fund will be called bond fund and, according to the minister, the new name will better reflect the investment strategy in this fund. The change in fund valuation should enable purchase of securities of longer maturity with higher potential return. The balanced fund will be renamed to mixed fund and the growth fund will be labeled equity fund – both will have no guarantees. A brand new index fund is to focus on stock markets and follow the performance of a selected stock index or a basket of indices. There will be no guarantees in this fund, either.
Savers will be able to allocate their savings into two funds at a time in the case that one of them will be the conservative one. Since next April, young people entering the pension saving system for their first time will have 180 days to choose a pension fund management company.
SITA