Slovenia: Labour ministry proposes further increase of retirement age after 2020

The labour ministry has prepared a white paper on pensions, which proposes further reform measures after 2020, when all the measures from the 2012 reform should be implemented, local media reported on Wednesday. According to the paper, the retirement age has to be increased by one or two years until it reaches 67 years. At present, the retirement age stands at 59 years. According to the 2012 pension reform, the retirement age should be raised to 65. The early retirement schemes should be abolished, the paper states. The calculation of pensions would be based on the best-earning 34 years and not the current 24. Moreover, the paper introduces point system which measures the ratio between individual income and the average wage in the country. Part of the funds which are intended for allowance would be allocated to people who receive the lowest pensions.

According to the white paper, the pensions should be indexed 60% to wage increase and 40% to cost of living growth. Between 2030 and 2040 the pensions should indexed 30 to pay growth and 70% to the cost of living rise. According to Andraz Rangus, the head of the task force which draw up the white paper, the pension from the first pillar will rise and will represent 60-70% of the last monthly wage of a person. Without further reform measures, government spending on pensions will comprise 15.3% of GDP by 2060 from 11.8% of GDP at the moment due to the negative demographic trends in the country. Thus, Slovenia will see the quickest growth of pension expenditures among all EU countries. In its latest report on Slovenia, the EC noted that Slovenia is the EU country with the highest budget sustainability risk in the long-term due to its ageing population.

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