Slovak News Back to the news
INEKO: Next Government Must Hold Back Pension Increases
Wednesday 05 May 2010 Zoom in | Print page
Bratislava, May 5 (TASR) - The future government should reduce pension increases to match the inflation level and gradually increase the retirement age to 65 in order to make the pension system tenable, according to an analysis drawn up by the Institute for Economic and Social Reforms (INEKO).
'These changes are necessary if the system is to stay in place until at least 2040,' cautions the analysis.
If the future government doesn't consolidate public finances, raise taxes, cut expenditures or introduce some change in the pension system, Slovakia will go bankrupt in 2014, states the document. 'The official public debt will exceed 60 percent of GDP in 2014 if no changes are made,' claims INEKO.
If the future government decides to maintain the current rate of pension increases in line with the average growth in salaries and inflation, the retirement age would need to be increased to 70. According to INEKO, the retirement age could be increased to 65 if public finances are maintained by lowering pension and public administration deficits.
The calculations used to draw up the analysis were based on the World Bank's PROST model.
All rights reserved. Any publishing or further dissemination of press releases and photographs from TASR's resources without TASR's prior written approval constitutes a violation of the Copyrights Act.
