SDS Proposes All State Assets Should Move to a Demographic Fund, Mostly for Pensions

By , 30 Apr 2019, 11:50 AM Politics
SDS Proposes All State Assets Should Move to a Demographic Fund, Mostly for Pensions pixnio.com CC-by-0

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STA, 25 April 2019 - The opposition Democrats (SDS) filed into parliamentary procedure on Thursday a bill on the creation of a demographic fund to prop up the pension system. In line with the proposal, all of state assets would be transferred to the fund, which would mainly finance pensions.

SDS head Janez Janša called on all parliamentary parties to add their remarks. The only point the SDS will insist on is the transfer of all state assets onto the fund, he said.

Otherwise the arguing over which assets should be transferred to the fund will go on forever, he said.

The aim of the bill is to improve the financial situation of pensioners, which is currently below the level of Slovenia's development, and lift the pressure off employers and employees, who have to pay increasingly high contributions to the pension fund to keep the pension system sustainable.

He noted that the name National Pension Fund would be more appropriate than the demographic fund.

According to Janša, the transfer of all state assets onto the fund would also facilitate management of state assets, which is currently not transparent because it is divided among several institutions.

The role of the sole shareholder would be assumed by the National Assembly to make sure that the management of state assets would not be "in the hands of those on power."

In line with the SDS's proposal, the current custodian of state assets, Slovenian Sovereign Holding, would be transformed into the Slovenian demographic fund.

All other investments of the state, the pension fund management KAD fund, the real estate investment firm DSU and the Pension and Disability Insurance Institute (ZPIZ), the public pension insurer, would also be transferred to the new fund.

According to SDS MP Andrej Šircelj, the fund would have a supervisory board and a management.

The supervisory board would have 13 members, put forward by deputy groups. The number of members put forward by each deputy group would depend on the size of the deputy group.

The supervisors would be appointed by the National Assembly with a two-thirds majority of all MPs present.

The management of the fund would consist of the chairman and two members, who would be appointed by the supervisors based on a public call for applications.

Every year, the fund would give 50% of the dividends and rents it would receive, and 10% of all sale proceeds to ZPIZ.

The remaining 50% of the dividends and rents, and 40% of sale proceeds would be accumulated.

The demographic fund would allocate 50% of sale proceeds to the state budget to pay off debts.

The idea of a demographic fund as one of possible instruments to ensure a long-term sustainability of the pension system was floated years ago.

Its establishment was envisaged under the 2013 pension reform of the Alenka Bratušek government and every government since has dealt with the issue.

The current government coalition has also committed to founding such a fund in its coalition agreement. While the Finance Ministry has not revealed when the bill would be ready, Karl Erjavec, the head of the coalition Pensioners' Party (DeSUS), indicated that it might be ready this autumn.

Reacting to the SDS's motion today, most parties said they would study the proposal and respond to Janša's invitations to talks. The ministry, as well, said that it would study the proposal, although it was working on its own bill.

The coalition Marjan Šarec List (LMŠ) and the Modern Centre Party (SMC) expressed belief that any proposal on how to shape the fund would be useful and worth debating.

Matjaž Han, deputy group head of the coalition Social Democrats (SD), said that establishing a demographic fund would be much more than a project of a single party, this government or this coalition. This would be a project of the generation and a topic that must be discussed.

Erjavec meanwhile said that this was an important bill but expressed fear that the motion was politically motivated, adding that if the SDS were serious about it, it would have endorsed a similar bill drafted by DeSUS.

He said he was looking forward to seeing the bill drafted by the Finance Ministry. The ministry meanwhile said the task force working on the bill would model the bill on best practices of similar funds abroad.

All out stories on demographics in Slovenia can be found here

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