BRATISLAVA, August 6, (SITA) — The Slovak Parliament approved the Cabinet’s proposal for accelerated legislative proceedings to changes in the first and second pension pillar. All 81 MPs present for the governing SMER-SD have voted in favor of the proposal, the opposition did not participate in the vote. After the vote, opposition MPs displayed a black banner with a white text SMER-SD = thieves of pensions.
The Cabinet of Robert Fico asked parliament for accelerated procedure on this draft bill on Monday last week. It claims that because of worse than anticipated development of public finances, it wants to reduce contributions savers pay to the second pension pillar one month sooner that originally planned, from the beginning of September, and not the beginning of October.
Opposition SaS deputy Josef Mihal accused the Ministry of Labor, Social Affairs, and Family of grossly violating the government’s legislative rules when it submitted the proposal to change pension contributions. He pointed out that according to applicable rules, the draft bill on social insurance should have been published in advance on the web portal of prepared legislation. „Thus, the interdepartmental review procedure is therefore invalid from the beginning,“ said former Minister of Labor and Social Affairs.
The current Minister of Labor and Social Affairs, Jan Richter, who is presenting the draft legislation, maintains that the conditions to discuss the amendment to the Social Insurance Act in accelerated proceedings have been met. As he noted, earlier approval of lower contributions to the second pension pillar will bring EUR 40 million to social security provider Socialna Poistovna.
Based on the proposed changes, savers in the second pension pillar will pay reduced contributions to their pension savings. Instead of the current 9 percent, they will save 4 percent of their gross wage for pensions. Fees that pension fund management companies charge savers will increase and savers will be able to exit from the capitalization pension pillar in the period from October 1 to December 31 of this year. At the same time, people who are not yet clients of pension fund companies will be able to enter the pension savings pillar. Robert Fico’s government also proposes to abolish the automatic entry of young people into the second pension pillar with the possibility of leaving within two years of entry and instead suggests introducing voluntary entry for people aged under 35.
The minimum assessment base for the self-employed to calculate the contributions to social and health insurance from the beginning of next year will increase from the current 44.2 percent of the average wage to 50 percent of the average wage in Slovakia two years ago. The current 40-percent flat-rate deductible expenses for the self-employed will be replaced by a fixed sum of 420 euros per month. The Cabinet also raises the levy burden on income of contract agents and work performed outside an employment relationship.
SITA