Outlines of new Demographic Fund emerging

  • Written by  J.S., STA
  • Comments:DISQUS_COMMENTS
Simbolic photo Simbolic photo

The coalition partners appear to have agreed the outlines of a new Demographic Fund, which would manage state assets and provide an extra source of financing of public pensions. The bulk of partially or wholly state-owned companies would come under the control of the new entity.

The fund will own all assets currently held by the Slovenian Sovereign Holding (SSH), the bad bank, the para-state DSU and KAD funds, the pension insurer Modra Zavarovalnica and the stake in insurer Zavarovalnica Triglav currently held by the public pension insurer ZPIZ.

DARS, the national motorway company, will not be transferred to the Demographic Fund, although that might yet change, Robert Polnar, MP for the Pensioners' Party (DeSUS), told the press after a coalition meeting on Tuesday.

The assets to be managed by the Demographic Fund are currently valued at EUR 8.5 billion. Together with DARS, that would climb to EUR 11.5 billion.

According to current plans, 40% of dividends and 60% of proceeds from the sale of stock would be retained so that the assets under management grow in the long term. 40% of the dividends would finance public pensions, while the rest would go towards financing family policies and construction of nursing homes.

The fund's supervisory board will have 13 members, four appointed by the government and nine at the proposal of deputy groups. The supervisors will appoint a three-member management board.

Polnar said the proposal would now be put to the Economic and Social Council and was expected to be on the parliament's agenda before the end of the year.

The Demographic Fund is one of the biggest projects undertaken by the government, and the no. 1 priority for the DeSUS.

It has been under consideration for nearly a decade but successive governments have failed to agree its exact make-up.

In this government, the question which assets will be transferred to the fund and who will name the supervisory were reportedly the most problematic issues.

Coalition partners emphasised that the main points have now been agreed and said the relevant law was on track for passage by the end of the year.

Jožef Horvat of New Slovenia (NSi) welcomed the decision to spend a portion of the funds on family policies, while the Modern Centre Party's (SMC) Janja Sluga said SMC's warnings that it was necessary to be careful not to financially burden infrastructure companies had been heeded.

The opposition expressed some reservations even as said it had not yet been acquainted with all the details.

The Social Democrats (SD) suspect that the fund will not help finance pensions, rather it will be "another agency for selling assets," according to deputy group leader Matjaž Han.

The Alenka Bratušek Party (SAB) said it was against channelling funds into anything else except pensions.

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