SLOVAKIA - Changes to the investment regulations for the mandatory second pillar in Slovakia have been confirmed, with details to be announced at a later date the country's government has said.
In its latest mission statement on Slovakia the IMF had noted that "relaxing the restrictions on investment policies would increase the range of products available to savers and better align saving and investment objectives and horizons, and is an immediate priority".
A government spokesman told IPE: "I can confirm that the Slovak government is going to improve regulations on investment policies." However, he declined to give any further details.
According to Viktor Kouril, chairman of the board of directors at ING DSS in Slovakia, there currently is a discussion on how to implement changes, with one possibility to essentially maintain the status quo. Kouril branded the current approach "ultra conservative with guarantees".
Kouril thinks that this option would be "politically very easy" to realise but that Slovakia "will end up with 80% of clients investing in ultra conservative funds," which would defeat the object.
Another possibility would be to scrape guarantees in the two more risky portfolios of the three-part life-cycle model in the mandatory second pillar, in other words, the balanced and the growth funds.
This would leave only 10% of clients in the very conservative funds, Kouril explained.
The IMF also noted: "Maintaining a sufficient contribution rate and promoting the participation of new labour market entrants would help support this pillar".
According to the government spokesman there are "no plans for increasing contribution rates" and Kouril also sees "no way" of this happening under the current government.
For 2010 the Slovak pension funds reported an average return of 1.3% while assets grew to €3.7bn.