Bratislava, June 18 (TASR) – Introducing retirement age caps in Slovakia will increase expenditures for pensions and decrease the level of pensions itself, stated the Finance Ministry’s Institute for Financial Policy (IFP) director Lucia Sramkova at an expert conference on the draft constitutional law on introducing retirement age caps on Monday.
Sramkova added that if the draft law is adopted, people will retire earlier, but will receive lower pensions. IFP also pointed out that the retirement age caps will have to be balanced with compensatory measures and structural reforms.
According to INESS think-tank analyst Radovan Durana, introducing pension age caps will mean higher costs for the pension system. “The Social Insurance Act has such a solid position in Slovak legislation that it doesn’t need any constitutional guarantees. This is an effort to cover the real problem that these changes are about bring about – the future costs. We haven’t heard yet who will pay that,” said Durana. He went on to say that there are only three ways to increase the expenditure for pensions: to take money from the state budget, to reduce pensions, or to raise taxes and levies. There is no other way, he said.
Vice-president of the Association of Employers Unions (AZZZ) Rastislav Machunka views the retirement age caps only as political marketing. “We consider this draft constitutional law, including the introduction of some kind of minimum wage institute and the retirement age caps, as political marketing, not as a real meaningful change that the Slovak Constitution needs,” he said, noting that this proposal causes several risks in terms of the long-term sustainability of public finances. “Long-term sustainability is very important in terms of the business environment,” said Machunka, adding that this proposal is dangerous, as it lacks the quantification of the impacts as well as the amount of money this measure will require.
The draft constitutional law is already in Parliament. Smer-SD MPs would like to permanently limit the retirement age to 65 for men, 64 for women who have raised one child and 63 for women who have raised two or more children.