Slovak Labor Minister Proposes Pension System Choice Before Retirement

Slovak Labor Minister Erik Tomáš has proposed allowing people to choose between staying in the second pillar pension system or returning to the state Social Insurance system shortly before retirement. Under the proposal, those who leave the second pillar would receive a full state pension without reductions, but their accumulated private savings would be forfeited to the state. Opposition parties have criticized the plan as creating moral hazard, though they have not ruled out supporting a constitutional amendment that would guarantee minimum pension contributions at 4 percent of wages. Slovakia operates a multi-pillar pension system where the second pillar consists of private pension funds that workers contribute to alongside the state system, designed to supplement retirement income through individual savings accounts.