By: Moja Dolenjska
The fact that pensions will be lower under the new system was confirmed today by Finance Minister Klemen Boštjančič, a member of the Gibanje Svoboda party and Deputy Prime Minister.
Deputy Prime Minister and Minister of Finance Klemen Boštjančič at the signing of the agreement on amendments to the pension and disability legislation:
- In Slovenia, we have been facing an above-average increase in costs related to pensions.
- It is important to reduce this pressure, which will certainly be helped by the changes to pension legislation agreed upon with social partners.
- The costs associated with population aging will grow more slowly with this reform than they would without it.
- This will also contribute significantly to greater public financial sustainability.
In other words: Pensions will be lower. Everything else is verbal acrobatics – as one political observer also wrote on X.
It all makes sense. Otherwise, there would be no need to amend the pension legislation.
Why is this happening?
There are two main reasons:
- The pension base will now be calculated based on salary earnings over a 40-year period (with the possibility of excluding five years), as stipulated in the signed document. Salaries during one’s career are not evenly distributed – they tend to be significantly lower at the beginning and end. Currently, the pension base is calculated from 24 years; not long ago, it was just 18.
- Pensions will be adjusted less according to wage growth and more according to inflation. This means pensions will rise more slowly than wages. The transitions will be gradual.