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ADSS Wants Constitutional Law on Contributions to 2nd Pension Pillar

11.09.2007, 08:31
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The Association of Pension Fund Management Companies (ADSS) is open to discussion on a temporary reduction of the state-run social security provider's contribution to the second pension savings pillar and its later increase, only if the opposition parties agree with it too. "An ideal situation would be to pass a constitutional law that would determine contributions as such so that we would not have to open this topic every year," said ADSS Chairman Peter Socha. He continued that the proposal for a temporary reduction of the contribution rate to the system of old pension savings will probably be unacceptable to opposition parties and that "this could be a problem."
Mr. Socha confirmed that discussions on measures to be taken in the second pension savings pillar was launched last week at the top level between representatives of pension fund management companies and government representatives. "We are trying to find a solution that would stabilize the system and not harm savers," he said. Outcome of this negotiation, however, is nonexistent, according to him. "Further negotiations should deal with real figures, so that we know whether factual discussion is meaningful or not."
In the coming years, the deficit of social security provider Socialna Poistovna could be partially covered by a temporary reduction of its contributions to the second pension savings pillar. On Monday, representatives of the ruling coalition confirmed that experts of the Finance Ministry and representatives of pension fund management companies (DSS) are discussing the possibilities of reducing the deficit of Socialna Poistovna.
The draft revision to the law on social insurance from the Ministry of Labor, Social Affairs, and Family is scheduled as the last item on the agenda of the next parliamentary session, which should create enough space for further discussion with DSS. Prime Minister Robert Fico admitted that it is possible that discussions with DSS could lead to a solution that would be even more advantageous than the one proposed by the Labor Ministry, which, as for now, has his full support. According to Prime Minister Fico, it is too soon to talk about the form in which the draft revision to the social insurance law will be approved. "It is hard to say now, we are pushing the DSS and we need to squeeze from them as much as possible," said the prime minister after the coalition council. He added that no approved solution will be permitted to threaten the projected government deficit for next year, at 2.3 percent of the gross domestic product.
The Pravda daily reported information on Monday that DSS are debating the possibility of lowering contributions to the new capitalization pension pillar with the Finance Ministry and the National Bank of Slovakia, from their current nine percent of the gross monthly wage to six percent for the next three years, after which the contribution should again be nine percent.
Prime Minister Fico, however, is conditioning any agreement with DSS upon the stronger guarantee of pension savings in pension fund management companies. "Speaking for myself, I want to see guarantees there. I do not know whether we can reach an agreement if they are not there," said the prime minister, adding that he will insist that DSS mother companies guarantee finances in pension funds. He will also exert pressure for higher degree of appreciation of sources deposited in DSS.

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