Ljubljana related

04 Oct 2019, 11:30 AM

STA, 3 October 2019 - The government adopted on Thursday a set of changes to the pension insurance act equalising the base for pensions for men and women to 63.5% of the salary and regulating the status of pensioners who continue to work.

 Under the changes, the pension will no longer depend on whether the pensioner is a man or a woman but only on the pensionable years.

This means that men who have worked for a full 40 years will have their pension set at 63.5% of their wages as of 2025, up from the current 57.25%.

In this way male pensioners will be equal with female retirees, for whom the 63.5% is already in place.

Another change is that a pensioner will get by 1.36% higher pension for every child they have, yet this benefit could not be claimed for more than three children.

"We anticipate higher pensions and thus a higher degree of social security for future pensioners," Labour Ministry State Secretary Tilen Božič said after the government session.

He indicated that the long transition period until 2025 was a means of encouraging workers, especially those aged 59 to 64, to work longer.

Božič explained Slovenia fared worse than other countries in this age group, as many retire rather early, which he said was a major issue of Slovenia's pension system.

"We're focussing on prolonging working, so those who decide to work longer will be better rewarded," the state secretary said.

As for the pensioners who continue to work, they will initially get, alongside the salary, 40% of the pension they are entitled to.

After the first three years of being a working pensioner, their pension will drop to only 20%, as is the case now.

Božič said the government also expected a positive effect from this additional benefit for pensioners who opted for the dual, worker-pensioner status.

Before today's government session, the changes were endorsed by coalition parties, which however indicated some changes could still be made in parliament.

The Pensioners' Party (DeSUS) said the transition period to equalize men and women pensioners in 2025 was too long and should be shortened.

"We've agreed the ministry will make another round of calculations to see the actual financial impacts," deputy group leader Franc Jurša said after the coalition meeting.

He could not say for sure whether DeSUS would file any amendments, noting they would see if some corrections were needed once the legislation was in parliament.

The Ministry of Labour, Family, Social Affairs and Equal Opportunities outlined the changes in March, whereupon they were subject to intense talks with employers and trade unions.

The Economic and Social Council, the country's industrial relations forum, gave them its seal of approval last week, at the same time calling for more extensive changes.

All our stories on pensions in Slovenia are here

03 Oct 2019, 11:03 AM

STA, 2 October 2019 - The Constitutional Court has ruled in a close vote that the retirement and disability pension act is not unconstitutional in the part that prevents sole proprietors from receiving full pension if they decide to continue working after reaching retirement age.

The top court, which received the review request from the Ljubljana Labour and Social Court, said on Wednesday that intergenerational fairness, equality and financial sustainability took precedence over the interests of sole proprietors.

It ruled that the constitutional right to pension does not ensure that individuals receive old-age pension when they do not give up working. The Constitution guarantees the right to a pension to individuals who have paid their contributions if they also meet all other reasonable conditions.

It is reasonable to make full pension conditional on giving up work, considering the benefits pursued, said the court, which decided in a 4 to 5 vote that the act was not in violation of the constitutional right to social security. Two judges also submitted dissenting opinions.

Meanwhile, the court was unanimous in its decision that the act was not in contradiction of the constitutional principle of equality, comparing other groups who may also continue working after reaching retirement age.

It also said that the act followed the principle of protection of legitimate expectations and was not in conflict with the right to free economic incentive.

The court also said that there are a number of reasons why sole proprietors decide to either continue work or retire, adding that it was not the legislature's intention to encourage sole proprietors to stop working and also could not have foreseen such decisions being made.

Sole proprietors, who continue working have to give up up to 80% of their pension. Meanwhile, legislative changes are in the pipelines that would decrease this figure to 50%.

The Chamber of Crafts and Small Business (OZS) responded by stressing the decision had been made in a close vote and that dissenting opinions showed that the existing rules were neither appropriate nor just.

The OZS has been striving for Slovenia to introduce double status of pensioners who want to continue working, a solution that would enable them to receive full pension.

The chamber agrees with judge Etelka Korpič Horvat, who said in her dissenting opinion that double status would be beneficial for everybody. Retired proprietors would be able to continue working and would also contribute to the pension and health insurance purses.

"It is also far from insignificant that double status eliminates the poverty of those with low pensions. Double status strengthens the value of labour without preventing the young generations from working," the OZS quotes Korpič-Horvat's opinion.

The chamber also expressed the belief that the decision and the dissenting opinions would convey to the National Assembly that it could introduce a double system that would be much fairer and more reasonable than the existing provisions.

27 Sep 2019, 14:15 PM

STA, 27 September - Employer representatives announced at Friday's session of the Economic and Social Council (ESS) they were withdrawing from the industrial relations forum because bills were being filed in parliament without any regard for the forum. The trade unions followed suit and the head of the ZSSS trade union confederation resigned as the ESS president.

The latest development that angered the employers was Wednesday's decision of the Left, an opposition partner of the minority government coalition, to end a deadlock in talks with the coalition and table a bill that would in effect abolish supplementary health insurance and replace it with a progressive levy that would increase costs for employers.

Slovenian Employers' Association (ZDS) secretary general Jože Smole told the STA that this had been just the most recent blow, with the council being completely sidetracked under this government. He went on to list several pertinent legislative proposals, all of which were tabled by the Left.

Smole said it all began with the raising on the minimum wage, continued with the proposal to raise wages for students and later with proposed changes to the labour relations act that would give all parents a paid day off on their child's first school day.

Smole stressed that even though all of these changes had a major impact on the social partners, they had not been supplied with any material, analysis, calculations "on the basis of which we could discuss things, let alone decide on them".

"Social dialogue is dead," he said, adding that legislative proposals could no longer be affected by the social partners once they were filed in parliament.

The ball is now in the court of Prime Minister Marjan Šarec, Smole summarised the position of the employers.

Commenting on the situation, Labour, Family, Social Affairs and Equal Opportunities Minister Ksenija Klampfer told the STA that she had warned the Left on several occasions that "this is not how things should be done".

The filing of bills without coordinating them with the ESS also bothers the representatives of trade unions, who thus joined the employers, the ZSSS's Lidija Jerkič told the STA, adding she also resigned as the council's head. Her term would have expired at the end of October.

The employers said they were withdrawing until further notice, while Klampfer said she would try to solve the situation as soon as possible.

Notably, before suspending the forum, the social partners okayed both legislative proposals on the agenda of the session, one dealing with the minimum monthly unemployment benefit and the other equalising women's and men's pension rates for those with 40 years of pensionable service.

The Labour Ministry wants to increase the minimum monthly unemployment benefit from EUR 275 net to EUR 392 net while simultaneously stiffening conditions.

The proposed EUR 530 gross, or EUR 392 net, would level the minimum unemployment benefit with the basic minimum income for single-person households.

As for the pension rate, the plan is to increase it to 63.5% of the long-term average wage by 2025. This rate is already in place for women, while for men it presently stands at 57.25%.

11 Jun 2019, 13:48 PM

STA, 10 June 2019 - Coalition partners and ministers agreed at Monday's summit that healthcare and the pension system would be the priorities of Slovenia's budgets in 2020 and 2021. Each will get EUR 200-300 million more annually.

Nevertheless, Finance Minister Andrej Bertoncelj said as he spoke to the press after the Brdo pri Kranju meeting the budgets would still be in surplus.

The coalition and government partners met to agree further steps in planning the budgets for the coming two years.

The government is due to send the draft budgets to parliament by 1 October based on a budgeting decree which was passed in April.

The decree caps expenses for 2020 at EUR 10.45 billion, whereas for 2021, they can be a bit higher, at EUR 10.50 million.

Bertoncelj said he had presented the planned revenue and the spending ceilings for the state budget, the health and pension purses as well as for local government.

He expects the government to meet for its first session dedicated to the budget on 4 July, by when the ceilings for individual budget users should be ready.

Although he does not expect everyone to be happy with the distribution of funds, Bertoncelj intends to insist on the ceilings set in April, since this would keep the budgets within the fiscal rule.

The coalition also agreed to have the budget surplus at around 1% of the country's GDP, while Bertoncelj would also like to cut pubic debt to 65% and 61% of GDP, respectively, with a view to have a structurally balanced budget by 2022.

"The budgets for the next two years will have to be within this framework, and we committed to it today," he stressed.

The budgets will be drafted on the basis of the government's macroeconomic forecaster IMAD's outlook, which puts Slovenia's growth for 2020 at 3.1% and at 2.8% for 2021.

Bertoncelj pointed out Slovenia's GDP growth was now double the eurozone average, and its public debt was being reduced the fastest among all eurozone members.

Health Minister Aleš Šabeder, on the other hand, presented the situation in healthcare, noting the priorities were a long-term care bill, improving the management of medical organisations and reducing waiting times.

Happy the healthcare system can count on an additional EUR 400-600 million in 2020-2021, he said the funds would have to be spent in line with the priorities.

"All resources on the market will probably have to be identified and a decision made on how to involve them in cutting the long waiting times," said Šabeder.

Prime Minister Marjan Šarec agreed, but was quick to add this should not be a cover for "permanent privatisation" of the healthcare system.

Šabeder stressed the long waiting times would first be tackled where they were the severest, announcing the first pilot project for orthopaedics.

He, however, admitted his ministry was just starting to tackle the issue, stressing waiting time records would first have to be sorted out.

Šabeder believes more funds would have to be provided to finance not just individual doctors but entire teams of doctors and nurses to cut the waiting periods.

He said the bill on long-term care could be adopted by the end of the year, but noted it was too early to discuss funding, as several scenarios were still being studied.

The coalition partners were generally happy with the summit, with Defence Minister Karl Erjavec, the leader of the Pensioners' Party, saying the budgets should make it possible to meet the country's commitments to NATO and to raise pensions.

Šarec, on the other hand, said names of Slovenia's possible candidate for the European commissioner had not been discussed.

30 Apr 2019, 11:50 AM

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

14 Mar 2019, 10:20 AM

STA, 13 March 2019 - The Ministry of Labour, the Family, Social Affairs and Equal Opportunities has proposed changes to the pension system under which retirement age for persons without 40 years of pensionable service would gradually increase from the current 65 years to 67 by 2034.

 

Under the current legislation, employees who do not have 40 years of pensionable service may retire at 65, but receive lower pensions.

The new proposal raises the retirement age for these persons to 67 years by two months a year until 2034, Minister Ksenija Klampfer said as she presented the proposal to the press on Wednesday.

The condition that a person must have 40 years of pensionable service for old-age retirement under 67 years remains in force.

The pension rate for persons with 40 years of pensionable service is proposed to be increased in six years to 63% of the long-term average wage for both men and women. The current rate is 57.25% for men and 60.25% for women.

An additional 1.25 percentage points will be added to the rate to persons who were on parental leave in the first year of the child's life, said Klampfer.

The higher pension rate will allow for higher old-age, widow, disability and family pensions and compensations from disability insurance, the minister explained.

Retired persons will also be able to continue to work after meeting the conditions for old-age pensions and receive 50% of their pensions for three years and then full pension after that, with some safeguards being in place.

There will be certain conditions for this right to be exercised, including that contributions for social security have been paid in full, Klampfer said. At present, pensioners who continue working only get 20% of their pensions.

The proposal follows the solutions agreed on in the coalition agreement, said the minister, noting that in 2025, pensions of persons with 40 years of pensionable service would be by 8% higher on average.

All our stores on employment in Slovenia are here

22 Aug 2018, 10:04 AM

STA, 21 August 2018 - The incoming government coalition is planning to upgrade the pension system and shore it up with a demographic fund in order to make it financially sustainable in the long run. Unofficial information obtained by the STA also indicates the partners plan to raise pensions and welfare benefits. 

31 Jul 2018, 10:38 AM

STA, 31 July 2018 - Slovenian pensioners will be given a boost to their personal finances on Tuesday. Along with their July pensions, they will also get an annual allowance of between 100 and 410 euro. 

13 Jun 2018, 13:59 PM

STA, 13 June 2018 - The OECD has proposed that Slovenia undertake a comprehensive tax reform in order to strengthen its resilience in the face of mounting demographic challenges. The centrepiece of the proposal is a reduction of the tax wedge offset with higher income tax and an expansion of the tax base. 

24 May 2018, 09:05 AM

STA, 23 May 2018 - Slovenia was urged to make responsible fiscal policies and continue reforming its health and pension systems as the European Commission presented its spring recommendations for member states in Brussels on Wednesday. The Commission also called for privatisation to continue as planned. 

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