SLOVENIA – The Republic of Slovenia is set to launch a funded defined contribution scheme for the civil service.

The International Monetary Fund said that “a new civil service funded DC pension plan will soon be introduced and this should add approximately the same amount to the savings pool in its first full year of operation”.

It said: “Voluntary supplementary pensions may be written as life insurance, or through specialist pensions companies or pension mutual funds.”

These sources of contractual savings accounted for assets of 35.9 billion tolars as at June 30 last year. The IMF said they are growing by around 10 billion tolars a year.

The IMF added: “As of August 31, 2003, there were more than 212,000 members in the new voluntary system, of which 84% had been written through life insurance or pensions companies.

“Three of four of the specialist pension providers now appear to be operating at above break even level.”

Slovenian supplementary DC voluntary pensions funds provided through insurers, pension companies and pension mutual funds are required to provide a guaranteed monthly return based on 40% of the long term real government bond rate over the previous two years, adjusted upwards by an inflation index (TOM).

The IMF said: “There is no reason that vibrant private insurance and pensions sectors could not be further developed.”

But is said that there is “a clear gap in the supervision of the pensions sector, which is split between the securities market and the insurance supervisors”.