Social partners sign deal on pension changes
Ljubljana, 2 April - Social partners have signed an agreement determining how the keystone act governing pensions will change, a deal that Prime Minister Robert Golob described as a balanced solution.
Ljubljana
Social partners sign an agreement determining how the keystone act governing pensions will change.
Photo: Bor Slana/STA
Ljubljana
Lidija Jerkič, the president of the ZSSS trade union confederation, at the signing of an agreement determining how the keystone act governing pensions will change.
Photo: Bor Slana/STA
Ljubljana
Jakob Počivavšek, the head of the Pergam trade union confederation, at the signing of an agreement determining how the keystone act governing pensions will change.
Photo: Bor Slana/STA
Ljubljana
Branimir Štrukelj, the head of the KSJS trade union confederation, at the signing of an agreement determining how the keystone act governing pensions will change.
Photo: Bor Slana/STA
Ljubljana
Prime Minister Robert Golob (left) and Labour Minister Luka Mesec at the signing of an agreement determining how the keystone act governing pensions will change.
Photo: Bor Slana/STA
Ljubljana
Finance Minister Klemen Boštjančič at the signing of an agreement determining how the keystone act governing pensions will change.
Photo: Bor Slana/STA
Ljubljana
Vesna Nahtigal, the director general of the Chamber of Commerce and Industry (GZS), at the signing of an agreement determining how the keystone act governing pensions will change.
Photo: Bor Slana/STA
Ljubljana
Social partners sign an agreement determining how the keystone act governing pensions will change.
Photo: Bor Slana/STA
Ljubljana
Social partners sign an agreement determining how the keystone act governing pensions will change.
Photo: Bor Slana/STA
Ljubljana
Social partners sign an agreement determining how the keystone act governing pensions will change.
Photo: Bor Slana/STA
Ljubljana
Social partners during signing an agreement determining how the keystone act governing pensions will change.
Photo: Boštjan Podlogar/STA
Pension reform is essential because society is ageing and the sustainability of the pension system must be endured, he said as the agreement was signed on Wednesday, marking the start of legislative proceedings.
The biggest change to the Pension and Disability Insurance Act will be an increase of the retirement age from 60 to 62 for those with 40 years of service. The increase will be gradual, starting in 2028 and becoming fully implemented in 2035.
Those who have not worked the full 40 years will be able to retire at 67, up from 65 at present. Those with children and those who have done military service will be able to lower the retirement age slightly.
Pensionable earnings will be calculated differently. Now the 24 most favourable consecutive years are taken as the base, from 2035 pension will be calculated for the entire 40 years of work minus five least favourable years.
For workers retiring after a full 40 years of pensionable service, pension would amount to 70% of pension base, 6.5 percentage points more than at the moment.
There will also be a new Christmas bonus for pensioners, starting with EUR 150 this year and raising by EUR 20 per year until 2030.
Golob said the principal goals the social partners had pursued were making sure the income of current pensioners remains suitable, ensuring the long-term sustainability of the pension system, and giving younger generations the certainty that pensions will remain decent when they retire.
"These three goals had to be put together into a mosaic and I'm proud that all social partners have succeeded in doing that," he said.
The agreement is the result of several months of negotiations during which multiple options were on the table, including changing the contributions of employees and employers.
Amidst warnings by the corporate sector that any changes which would increase labour costs are unacceptable, the contribution rates remain unchanged, at 8.85% for employers and 15.5% for employees.
Employers described this as the main achievement of the negotiations because it will not increase the tax wedge.
"At the beginning this was a mission impossible, but over the months of negotiations we realised that a consensus could be found," said Marjan Trobiš, the head of the Association of Employers.
For him, the main value of the pact signed today is in that any changes that might be made in the course of the legislative procedure must be cleared by social partners.
Trade unions acknowledged that the agreement was a not ideal, but said it is an improvement over the original negotiating positions put forward by the government.
Their underlying aim was to protect present and future pensioners, while the unions "grudgingly accepted that the contribution rate for employers will not increase," said Lidija Jerkič, president of the ZSSS trade union association.
The pension law changes are one of the government's flagship projects, along with health reform and an overhaul of housing policy.
Some experts have, however, warned that the changes fall short of what would be needed given the current state of the economy and demographic change projections.
Jaka Cepec, a professor at the Ljubljana School of Economics and Business, recently told the STA that the changes should be broader, instead they are "a mini reform, not a major structural reform that would result in serious changes in the long term."
He said there had been no consideration of whether the current system where the active population finances pensions is sustainable in the long term or whether individual investment accounts should be promoted to a greater degree.
Valentina Franca, a professor of labour and social security law at the Ljubljana Faculty of Administration, thinks that the changes should be coupled with a broader crackdown on illegal work and untaxed platform work.
Additionally, as the retirement age rises, measures should be put in place to adjust the workplace for older workers, especially in industries where ergonomic adjustments would be needed. Absent that, the changes will not produce the desired results, she said.