SLOVENIA - Early retirement will be penalised under a new law proposed by the Slovenian government but there is no increase in the statutory retirement age.

New regulations will "gently convince people to opt for later retirement", Marko Strovs, state secretary in the labour ministry, was quoted as saying in Slovenia Business Week.

This announcement comes only days after Slovenia received a warning by the International Monetary Fund (IMF) on the instability of its current pension provision.

The IMF delegation also found consensus on a pension reform was difficult to achieve mainly because of fierce opposition by unions.

The proposed government bill - which includes awards for working longer and penalties for retiring early - has already been criticised by the association of free trade unions of Slovenia ZSSS, as the body argues new regulations would be unfair to people who started working at a young age and will lead to more poverty among pensioners.

According to calculations by the daily newspaper Dnevnik, a man retiring at the age of 58 - five years earlier than the statutory retirement age - will have an 18% lower pension than a man of the same age retiring today.

The union argued for people in the manufacturing sectors the bonuses offered for working up to the statutory retirement age of 63 for men (58 for women) were no use because they had often lost their jobs years before.