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Slovenia:
Second pillar pensions defined contribution
In December 1999, the Slovenian parliament passed legislation to set up a three pillar system for retirement provision. The first pillar is a compulsory pay-as-you-go system covering all employees. The second pillar is compulsory for certain categories of employee, such as civil servants, but private companies will be free to choose whether to set up a plan. The third pillar consists of voluntary individual provision.
For a private company to set up a pension fund, at least two thirds of the workforce must want to join the plan. The minimum number of employees has been set at 1,000, although smaller companies will be able to participate in a collective plan operated by a bank or insurance company. Plans will operate on a defined contribution basis with individual accounts. Monthly contributions per employee have been set at a minimum of SIT3,000 (US$16) and a maximum of SIT30,000 (US$160). Employer and employee contributions up to SIT30,000 will be tax deductible within certain limits and employer contributions will not be regarded as benefits-in-kind in the hands of employees.
Under normal circumstances, no pension will be payable from an individual’s account before age 60 and there is a further condition that 120 monthly first pillar contributions must have been paid.
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