Radovan Ďurana z INESS komentoval pre The
Slovak Spectator dňa 19.10. 2009 návrh zhodnocovať dôchodky v II. pilieri
minimálne na úrovni valorizácie dôchodkov v I. pilieri.
IF THERE were such a competition, Slovakia’s second pension
pillar would probably win the world title and certainly the central European
crown for most frequently modified pension scheme.
After offering a series of opt-out opportunities to the 1.5
million people who currently save for their retirements in the privately
managed second pillar of Slovakia’s pension system, the government has cut the
fees that the pension fund management companies can charge clients to
administer the funds.
However, Prime Minister Robert Fico is still not happy with
the way the pension fund management companies, which entered the system as part
of the previous, centre-right government’s pension reforms, operate and he now
plans to produce a new rule for the second pillar. This rule will state that
that the growth in yields of privately managed funds must at least match
government-set rises in the state-run pay-as-you-go pillar.
“Today is the day when the Slovak government has definitely
lost all patience with the pension funds management companies,” said Fico on
October 7, as he announced the new plan, as quoted by the TASR newswire. “They
were lying when they lured people into their traps.”
The prime minister described the second pillar as a
“sophisticated fraud” and suggested that the move would defend the interests of
savers.
Finance Minister Ján Počiatek has now been given several
weeks to draft an amendment to the law on old-age pension saving.
However, economists say that while the pay-as-you-go system
can be politically influenced, the private pension pillar in fact depends on
the moves of the economy.
The opposition Slovak Democratic and Christian Union (SDKÚ)
suggested that what the Fico team now aspires to do is to regulate global stock
markets with a law passed by the Slovak Parliament.
According to Eugen Jurzyca of the SDKÚ, this will be just
another set of laws that achieves nothing except attracting media attention.
His colleague Ivan Štefanec said that now the government is coming to the point
where it will not have the money to pay pensions from the first pillar and wants
to bring the second pillar closer to the pay-as-you-go system.
“It is only camouflage, designed to cover mistakes and the
waste of public funds,” said Štefanec, as quoted by the SITA newswire.
Observers also suggested that if the government manages to
force the pension fund companies to guarantee savers’ gains at the level of
pension valorisation, the way businesses are run in this segment might change
for good.
On March 11, the Slovak parliament adopted a revision to the
law on old-age pension saving. Beginning on July 1, 2009, the fixed fee for
administration of second pillar pension funds was cut from 0.065 percent to
0.025 percent of the net monthly value of the participant’s assets in the fund.
It also introduced a new, variable fee, dependent on the actual yields of the
pension funds.
“The government has
significantly changed the motivation of pension fund management companies,”
Radovan Ďurana, of the Institute of Economic and Social Studies (INESS)
economic think tank, told The Slovak Spectator. “The calculation of their
revenues from fees is tuned in such a way that their administrators are
motivated to achieve low revenues with minimal risks.”
According to Ďurana,
eventual losses would significantly affect their business results so they are
motivated to invest only in relatively safe securities and even term deposits.
“The system of fees
motivates them to sell securities, which in the case of long-term investments
could bring appropriate gains for the savers,” Ďurana said.
Ďurana said that the
paradox of the state’s proclaimed desire for privately managed funds to match
public fund growth is that that the government is having to take on more debt
and borrow funds from investors in order to boost first pillar pensions, while
it is precisely the second pillar pension fund management companies which are
buying a considerable share of state securities to fund that debt.
“For example last
year the pensions were valorised [i.e. raised to reflect inflation and other
costs] by 6.95 percent, which is considerably more than the annual appreciation
of growth funds in the pre-crisis period,” Ďurana said.
Pension fund management companies said that the government’s
interventions have been endangering their operations as well as reducing, over
the long term, the value of the pensions of those participating in the second
pillar.
Ivan Barri, the executive director of the Association of
Pension Fund Management Companies (ADSS), told The Slovak Spectator in March
2009 that Slovakia was turning into the “cheapest pension savings system in the
world”.
However, Labour Minister Viera Tomanová has asserted that
the March amendment has not prevented pension fund management companies from
investing in equities. She said that the legislation has not had any impact on
the investment strategy of pension fund management companies.
“The fact that pension fund management companies have
adopted a more cautious approach at present, as their money is at stake, is in
a certain way a disadvantage for savers, but it is fully the decision of
pension fund management companies,” she said as quoted by SITA.
Ďurana said that the
minister’s statements about the funds’ freedom to invest is factually correct,
but does not paint the whole picture.
“The pension fund
management companies can decide where to invest but they do so within a frame
that the law defines for them,” Ďurana said. “Since the motivation of their
activities is, understandably, appropriate and sustainable profit, and under
the current rules this can be achieved only with investments with low-yield
risk, it is thus logical that their freedom to invest is significantly
limited.”
The
Slovak Spectator, 19 Oct 2009 Beata
Balogová
