Pension reform in Slovakia

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• Pension reform in Slovakia

Marek L e n d a c k ý Ministry of Labor, Social
Affairs and Family
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Pension reform and its impact on labor market

• .where are we going?
• increased link between contributions paid to the
  pension system and the pension benefits
• higher individual involvement in pension issues
• modern, flexible system with variety of choices
• monopillar vs multipillar system?
• what pension company?
• what pension fund?
• what form of pension?

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Pension reform and its impact on labor market

• .what to expect?
• higher motivation to stay longer on the labor
  market
• discouraging people from avoiding the social
  contribution payments
• increased discipline of employers
• ..and thus
• possible positive effect on overall employment
  rate, in line with European Unions Lisbon
  strategy/goals
• positive impact on public finance and individual
  entitlements

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Who? With whom?

• .what is new?
• relationship between employee and SIA/pension
  company
• Social Insurance Agency
• collects/transfers contributions to individual
  retirement accounts
• Pension company
• manages pension savings
• Life insurer
• life-time annuity providers in the new pension
  system

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Whats for employers?

• no major change compared to todays position
• no influencing of its employees
• no special contracts with SIA/pension companies

There is no link between employees and pension
asset management companies!
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Who is watching?

• .five levels of control
• pension company
• bears primary responsibility for proper
  management of pension funds, individual
  retirement accounts
• must have a special watchdog system

• Financial Market Authority
• oversees day-by-day life of each pension company

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Who is watching?

• .five levels of control
• depositary bank
• responsible for compliance of all transactions
  with the law
• reports all shortcomings to market watchdog

• auditor
• checks the performance of DSS and pension funds

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Who is watching?

• .five levels of control
• clients themselves
• with a non-stop access to their individual
  retirement accounts, they see the performance of
  their DSS and/or pension fund
• may vote and change their pension fund, even
  leave the pension asset management company and
  switch to a rival company

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Thank you for your attention!