Most parties see reform as way out of looming pension crisis

Ljubljana – Most parties standing in the upcoming general election agree that a comprehensive pension reform will be needed to ensure a sustainable pension system. They do differ though on the ways to achieve this. They also have different proposals on how to improve Slovenia’s demographic situation.

Every year the public pension fund covers the shortfall due to insufficient revenue by funds from the state budget. Last year, EUR 718.7 million went to cover the gap. The average number of pensioners was some 624,800, an increase of 0.01% year-on-year, the smallest uptick in the past 31 years.

Responding to questions from the STA on the matter, the parties urged a new pension reform as the existing system is already ten years old. They also called for efforts to tackle problems facing youth, including housing, and demographic challenges with most having in mind incentives for more children.

The ruling Democratic Party (SDS) would aim to ensure a pension system that provides decent pensions and is financially sustainable. They are in favour of educational system changes that would be aligned with the challenges of the time. They would also continue their family-friendly policy and tax policy.

New Slovenia (NSi) would strengthen the second pillar through tax and other incentives for both employees and employers. They also propose a tax-free year for first-time employees and improving work-life balance. For a worker replacing an employee on parental leave, contributions would be exempted.

The Freedom Movement party, SDS’s main rival according to opinion polls, finds it key that pensions must not be less than 10% above the poverty threshold. The second pillar should become mandatory and participation in the third pillar and staying in employment longer would be further encouraged.

Strengthening all the three pillars is what the Social Democrats (SD) have in mind. Slovenian Sovereign Holding would remain the guardian of state assets, and the party plans to tap the return of state-owned enterprises as a permanent source of a demographic fund. They also plan construction of 10,000 public rental flats and free kindergarten and school meals.

The Marjan Šarec Party (LMŠ) believes that the pension reform will be necessary but only in 10-15 years. They would also incentivise participation in the second and third pillars, boost value added, build non-profit flats and come up with measures to facilitate international adoption procedures.

Meanwhile, the Left says that Slovenia is not facing a demographic but a social crisis. An ageing population is not unusual, but society should take proper care of the elderly, they note, urging a pension increase. They see a gradual equalisation of employer and employee contributions as a key new source of co-financing pensions.

The Alenka Bratušek Party (SAB) would strive to ensure the retirement age does not increase and pensions are not lowered. Their priority is more non-profit rental housing and they would also cap rents. Moreover, 5,000 jobs for young people would be provided in the public administration.

Tying pension adjustment to wage growth is part of the Pensioners’ Party’s (DeSUS) platform. They regard mechanism that would compensate for the shortfall of contributions due to robotization as a new source for the pension fund. Anyone emigrating from Slovenia would have to pay back the costs of their education.

The National Party (SNS) highlighted that any pension reform was contingent on coordination among all parties in parliament, so listing measures made no sense at the moment. They would make the educational system more aligned with business. They mentioned “normalisation of the approach to sexuality” as a way to improve the demographic situation.

Our Land would ensure pensioners can work without restrictions if they want to and if their employer agrees. They would set up a targeted mechanism to encourage young people to take up farming.

Connecting Slovenia, which also includes the party Concretely, would not raise the retirement age but would allow pensioners to work in the private sector according to the needs of the labour market. Young people should not be misled into professions that do not offer a decent living, they added.