0

Until 2000, Slovenia had one of the lowest retirement ages in Europe, 56 years and 6 months. With the new millennium a higher retirement age has been gradually introduced in order to extend active working status: the current retirement age is 63 for men, and 61 for women.

However, due to certain special circumstances, it is possible to retire early. Circumstances for early retirement include: children, or because initial employment was before the age of 18. The average age for men retiring last year was 61 years and 11 months, while the average age for women was 57 years and 7 months. The most disconcerting fact is that a majority of retirees' pensions depend on compulsory contributions by the employed.

Now it seems that both men and women will have to work even longer, as the government has obviously decided to implement pension system reform which envisages, among other things, the raising of the full retirement age for both men and women to 65 years, while the minimum retirement age will be raised to 60 years. The reform also proposes that pensions should be calculated based on one's wages for the entire duration of his active status - currently only the best, consecutive 18 years count.

Aging population

Slovenia identified the problems in the pension system already in the 1990s. Many workers at that time took advantage of an early retirement or retirement with a full pension qualifying period, irrespective of age, while redundant workers could buy parts of their pension qualifying period. The number of retired people suddenly increased, and consequently the costs of the pension system also started to rise.

The Slovenian population is aging: life expectancy is predicted to increase by 2060 from the current 80 years to almost 90 years for women, and from 75 to 84 for men. With the population living longer, the period of receiving pensions is also longer. For example, in 2000 on average women received retirement benefits for 17 years, while men received them for 15 years. Last year women received pension benefits for almost 21 years, while men received benefits for more than 16 years. This represents a significant upward growth in expenditure for pensions. Also, due to population aging, the share of Slovenia's GDP intended for pensions will have to grow from 10.91% in 2000 in to 18.62% by 2060.

The reform opponents

The government believes it is high time to tackle modernization of the pension system. Although it is obvious that some changes to the current pension system are essential, the blueprint for reform has only been received positively by coalition parties. The trade unions, as well as the opposition, were strongly against the proposal. The President of the Independent Trade Unions (ZSSS) Dušan Semolič reproached the government that it had decided without the appropriate dialog. "The Government is lowering all standards of cooperation with the unions. We at least had dialogue before; now we don't even have that," declared Mr. Semolič. At the same time ZSSS announced demonstrations for November 28th to show their opposition regarding the raising of the retirement age.

Frozen pensions

Besides the higher retirement age, the pensioners were also alarmed by the government's announcement to freeze pensions. Some 60 percent of pensioners in Slovenia live on the edge of poverty, and one third of them receive a pension lower than € 400 per month. According to Mateja Kožuh Novak, the president of the Association of Pensioners' Societies (ZDUS), "the government let pensioners know that those who have little would have to get used to having even less." Also the junior coalition Pensioners' Party (DeSUS) took the opposition's side. When the government was discussing the 2010 and 2011 budgets, the party announced that if the budget proposal had in fact included a pension freeze, DeSUS deputies would have voted against it. Fortunately, the parties involved later reached a consensus, where coalition parties agreed to a 50% harmonisation of pensions with wage growth, which the cabinet finally adopted for the 2010 and 2011 budgets.