Ljubljana, 24 March (STA) - Labour, Family and Social Affairs Minister Ivan Svetlik unveiled on Wednesday a pension and disability insurance bill envisaging among other things the raising of the full retirement age to 65 for men and to 63 for women. The leveling of the full retirement age is envisaged in the second phase of the reform, he added.
All changes will be introduced gradually starting on 1 January 2011 and the transitional periods will be long enough so that the burden of the pension system reform will be distributed equally among all generations, the minister said.
The pension and disability insurance bill is the first phase of the reform, which is expected to kick in in 2011. It envisages that men will reach the full retirement age at 65 and women at 63 if they have at least 15 years of service.
For men with at least 40 years of service and women with at least 38 years of service, the required age for the right to old-age pension will be raised gradually to 65 and 63 years respectively in the period between 2011 and 2016.
Eligibility for early retirement will be give to men aged 60 years with at least 40 years of service and women aged 60 years with at least 38 years of service, Svetlik said.
Bonuses and penalties will be more incentive-oriented and will encourage people to stay active longer. If a person eligible for early retirement says active, they will have the right to 20% of their future pension until the age of 65 for men and 63 for women.
Bonuses and penalties for every month of late or early retirement will meanwhile be raised to 0.3% until the conditions for full retirement are fulfiled.
The period used for calculating the amount of pension is being extended from 18 to 34 years, said Peter Pogacar, the top official for the pension system at the Labour Ministry.
According to him, indexation of pensions will take into account both growth in wages (50%) and inflation (50%). Pensions will be changed once a year and their growth cannot be lower than the growth of consumer prices.
Svetlik added that special attention would be paid to those who started working before the age of 20 and those who work in hazardous environments. They will be able to retire under more favourable conditions, he added.
According to the minister, modernisation of the existing pension system is necessary to enable financial sustainability of the system after 2020, otherwise the pension purse will be in trouble.
Long-term projections put pension purse expenditure at 11.2% of Slovenia's GDP in 2020, and at 18.4% in 2050, Svetlik pointed out.