State Pension Fund Needs Extra €680m in 2020

By , 20 Dec 2019, 12:55 PM Politics
State Pension Fund Needs Extra €680m in 2020 Pexels CC-by-0

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STA, 19 December 2019 - The budget of the ZPIZ pension fund will stand at EUR 5.8 billion in 2020, but the state will have to chip in almost EUR 680 million to balance revenue and expenditure.

Under ZPIZ's financial plan for next year, adopted by the fund's council on Thursday, 84.2% of all revenue or EUR 4.9 billion will go for pensions.

Another EUR 145 million is planned to be spent on the annual holiday allowance for all pensions, up EUR 4.6 million from this year.

Almost 82% of the ZPIZ's revenue will come from contributions for social security and other taxes, with EUR 50 million expected from the state-owned KAD fund.

Pensions are planned to rise twice - by 3.5% in February, and by EUR 6.5 at the end of 2020 as part of an extraordinary rise if economic growth exceeds 2.5%.

Deputy ZPIZ director general David Klarič said as he outlined the plan the EUR 6.5 rise could still change as the upper chamber of parliament had filed a bill to rise pensions not in an absolute sum but as of percentage. In this case, the rise would amount to 1%.

The financial plan will now be sent to the government for approval. The government's representative on the council, Simona Poljanšek, said it was well prepared.

Klarič, however, said the budget would probably have to be overhauled in mid-2020 to adjust it to the latest pension changes which are expected to cost EUR 33 million.

The only council member voting against the financial plan was Frančiška Ćetković, who represents pensioners.

The plan does not envisage pensioners getting back what was taken from them due to the 2012 austerity legislation, which she assessed at 7.2%.

"We won't accept this share not being paid out," she said.

In response, Katja Rihar Bajuk from the Labour, Family, Social Affairs and Equal Opportunities Ministry announced the ministry would analyse retirement conditions as those retiring during the crisis were more affected than others.

Council president Dušan Bavec, who represents employers, said more pension revenue could be collected with more effective measures against grey economy.

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