SLOVENIA - The Slovenian government wants to increase incentives for people to save privately for their retirement and work longer, but the International Monetary Fund (IMF) thinks this is not enough the pensions regime.
Slovenian authorities want to have reached an agreement with the companies and unions on incentives by the end of the year to increase the actual retirement age.
But the IMF noted in a report on Slovenia: "The measures the government is considering, including greater incentives for a longer working life and private pension savings, are insufficient to ensure long-term sustainability and to generate resources to increase minimum pensions."
The IMF said it would like to see structural reform which includes an increase in the statutory retirement age and moderating pension indexation by de-coupling it from the increase in wages.
However, the fund's observers in Slovenia pointed out "the authorities regard more systemic reforms to be politically infeasible".
Slovenia has the lowest birth rate in Europe and the IMF expects the country's dependency ratio to go up to 60% by 2030 - making it one of the highest in Europe.
"In the absence of reforms, age-related expenditures are projected to increase by 8 to 10 percentage points of GDP and reach almost 30% of GDP by 2050," said the IMF.
According to a study by Allianz, half of the Slovenian working population (427,000 people) has joined one of the 11 occupational pension funds voluntarily while third-pillar pensions membership remains minimal with only 24,000 participants.
Only banking and public sector staff as well as employees in very hazardous jobs are required to join a pension fund.
Assets in the second pillar stand at around €500m while around €50m is invested through the third pillar.
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