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Ministry: Pension System Probably Won't Run Into Problems Until 2015
Wednesday 05 May 2010 Zoom in | Print page
Bratislava, May 5 (TASR) - The first pay-as-you-go pension pillar probably won't experience any significant financial difficulties until 2015, Labour, Social Affairs and the Family Ministry reacted on Wednesday to an analysis published by the Institute for Economic and Social Reforms (INEKO) earlier in the day.
"The situation would be better without the impact made by the second capitalisation pillar, as the transfer of state financial assets and the state budget does not fully cover contributions that went to the second pillar," the ministry points out in its statement.
INEKO analysis said that the next government should slow down the pension increases to match the level of inflation and gradually increase the retirement age to 65 in order to make the pension system tenable. "These changes are necessary if the system is to stay in place until at least 2040," cautions the INEKO analysis.
If the future government doesn't consolidate public finances, raise taxes, cut expenditures or introduce some changes in the pension system, Slovakia will go bankrupt in 2014, according to INEKO. "The official public debt will exceed 60 percent of GDP in 2014 if no changes are made."
In its response the ministry states: "We are fully aware of how important it is to financially stabilise the pension system; however, the measures can't be introduced rashly, without nationwide consensus."
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