SLOVAKIA - The Slovak Academy of Sciences has been joined in its calls for pension reform in Slovakia by the ministry of social affairs, a government adviser and a representative of the trade unions, during an AEIP conference in Bratislava.
In a recently published paper on Slovak future development, the Slovak Academy of Sciences pointed out that supplementary pension schemes were an integral part of the Slovakian pension system.
However, the academy argued the first two pillars, which in Slovakia make up the mandatory state pension system, should be reformed by changing the parameters in the first pillar and reducing contributions to the second pillar.
Up to 50% of the social contribution of 18% of the salary can be transferred to the second pillar at present, if a worker chooses to join this pensions pillar.
The academy also suggested the current voluntary third pillar should be widened to all employees and turned into a true supplementary pension system.
Part of the reform considerations should be to have right of determination for employer and employee representatives in the funded pillars, argued Viera Tomanova, minister for labour, social affairs and family in the Slovak Republic.
"It is not possible to leave the social sphere in the hands of financial institutions which operate on the principles of maximising profits," she noted.
"The claims that everything should be left to the experts are very misleading," she added, while arguing "often only so called experts" will be "the first to get out of the troubles that they caused" while the state and the social partners will be "left to solve the problem."
Her comments are somewhat inflammatory but are also made in light of the copuntry's pending general election in June.
Vojtech Tkac, an adviser to the same ministry, seconded the academy's call for the creation of a contributory occupational pension pillar instead of what he described as the current "deformed third pillar".
He also stressed there should be greater importance on the introduction of employer-employee participation in decision-making.
Until 2005, Slovakia's third pillar pension funds were made up of a board of directors which included employer/employee representatives. But tthis board was abolished when the government adjusting the supplementary funds to meet EU regulations, which included the separation of clients' and company assets.
Vladimir Mojs, from the Slovak federation of trade unions, claimed pension management companies now operate like most other insurance companies.
Similarly, Francesco Briganti, director at the AEIP, quoted a Moody's study which suggested non-profit or paritarian systems had fared much better during the crisis than profit-oriented pension companies.
However, Viktor Kouril, head of the Slovak pension fund association, defended the current system by stating employer representation on the board of pension fund management companies might pressure employees to join certain funds, thereby depriving them of the free choice and weakening competition.
"We are not trying to avoid a dialogue with paritarian institutions and some pension fund companies do have such discussions. But the actual management of the money should be left to experts," he pointed out.
"The employer system had its positive features, especially in the beginning when employer representatives helped attract new members. But now the system is stabilised," he added.