TRADE UNIONS’ ROLE IN PENSION REFORM AND PENSION SCHEME GOVERNANCE SLOVENIA

1. TRADE UNIONS’ ROLE IN PENSION REFORM AND PENSION SCHEME GOVERNANCE SLOVENIA METKA ROKSANDIĆ ILO ITC TURIN, 7 JUNE 2006

2. CONTENT • BACKGROUND OF THE PENSION SYSTEM IN SLOVENIA • PENSION REFORM IN 1999 • PENSION SCHEME GOVERNANCE

3. BACKGROUND OF PENSION SYSTEM IN SLOVENIA • A LONG TRADITION OF SOCIAL INSURANCE OF BISMARCK TYPE (solidarity, mutuality – pay-as-you-go system) • AFTER II. WW A COMMON (Yugoslav) SYSTEM - right to social insurance unified and equal for all • 1982 – AUTONOMOUS PENSION INSURANCE SYSTEM • 1992 – NEW LAW (new state and constitution)

4. REFORM OF THE PENSION SYSTEM – 1. STEP :GOVERNMENT’S PREPARATOION • October 1995 - IMF,WB on SLO government request - “New challenges confronting the Social Insurance System” • 1996 – PHARE programme “Starting-points of pension and invalidity system reform” • 1996 - Employers’ contributions dicreased (need for state financing!) • 1997 – public campaign for urgent reform (social partners and publicly) • December 1997 – “White book on pension reform”

5. REFORM’S PROPOSALS • RETIREMENT AGE 65 YEARS FOR ALL – THE ONLY CONDITION FOR RETIREMENT • COMPULSORY II. PILLAR • BIG DEDUCTIONS OF ACQUIRED PENSION’S RIGHTS • EQUAL RETIREMENT AGE FOR MEN AND WOMEN • SHORT TRANSITIONAL PERIOD

6. REFORM OF THE SYSTEM2. step – trade unions’ offensive • February 1998 – weekly Trade Union’s demonstration in front of the Govern.building • March 1998 –collecting of signatures (150.000 – sign for eventual referendum) • 28. March 1998 - big demonstration in Ljubljana (25.000 colleagues);the biggest one after II. WW • April 1998 – first sign of govern. abating (non compulsory II. pillar)

7. REFORM OF THE SYSTEM IN SOCIAL DIALOGUE • JULY 1998 – draft law in parl. procedure inspite of ESC demand for social partners consensus • 31.7.1998 –National Council demanded withdraw of draft law without consensus • AUGUST 1998 – FEBRUARY 1999 – intensively public debate, ESC seeks for consensus • APRIL 1999 – signed agreement between trade unions and minister of labour; ESC agree • 1. JANUARY 2000 – LAW ENFORCED

8. TRADE UNIONS’ RESULTS • “FULL PENSION” FOR 40 WORKING YEARS (38 YEARS FOR WOMEN) AT MINIMUM AGE OF 58 YEARS • VOLONTARY II. PILLAR (on the basis of collective agreements) • DIFFERENT AGE AND YEARS OF SERVICE FOR WOMEN (age 63-61,special benefits for women) • LONGER TRANSITIONAL PERIODS

9. PENSION REFORM RESULTS • COMPULSORY PENSION INSURANCE (pay-as-you-go) REMAINS FUNDAMENTAL • GRADUALLY HIGHER AGE FOR ACQUAIRING PENSION • GRADUALLY MORE YEARS FOR CALCULATION OF PENSION (best 18 years - not 10 years) • GRADUALLY DICREASED PENSIONS FROM 85% TO 72.5% OF AVERAGE WAGE (FOR 1 YEAR 1.5%, NOT 2%) • LONGER TRANSITIONAL PERIODS (UP TO 2014, 2022)

10. PENSION REFORM 1999 – CONCLUSIONS (1) • TRADE UNIONS THE ONLY REPRESENTATIVES OF INSURED (WORKERS) AND CONTRIBUTORS TO THE SYSTEM • TRADE UNIONS’ CLEAR STANDPOINT CRUCIAL FOR KEEPING THE SAME SYSTEM (AT THE BEGINING THE ONLY OPOSITION AGAINST NEW REFORM) • LONGSTANDING BATTLE

11. PENSION REFORM 1999 – CONCLUSIONS (2) • IMPORTANT ROLE OF SOCIAL ORIENTED YOUNGER SCIENTISTS • IMPORTANT POSITIVE ROLE OF MEDIA, • PROCESS OF THE ACCESSION TO THE EU – PLUS FOR REASONABLE PENSION REFORM • WITH SOCIAL DIALOGUE TO NEW REFORM – STEP FORWARD IN DEMOCRACY

12. FINANCING THE PENSION SCHEME • PILLAR • COMPULSORY • 24.35% OF • GROSS WAGE • 15.5%EMPLOYEES • 8.85% EMPLOYERS • ALL • 2. PILLAR • VOLUNTARY • + • COMPULSORY • COLLECTIVE • AGREEMENTS • EMPLOYERS • EMPLOYEES • INDIVIDUALS • 3. PILLAR • VOLUNTARY • INDIVIDUALS

13. PENSION AND INVALIDITYINSURANCE INSTITUT OFSLOVENIJA • AUTONOMOUS SOCIAL INSURANCE INSTITUT – IMPLEMENTS LAWS AND LEGAL ACTS • FINANCING BY CONTRIBUTIONS (AND STATE BUDGET) • GOVERNED BY REPRESENTATIVES OF THOSE WHO PAY CONTRIBUTIONS AND BENEFITIARS

14. FIRST CHANGES OF INSTITUTE’S GOVERNANCE • NEW GOVERNMENT, 2005.CHANGES IN GOVERNANCE • BEFORE- ASSEMBLY (30 MEMBERS) AND MANAGING BOARD (13 MEMBERS) • NOW- COUNCIL (27 MEMBERS) • MEMBERS’ STRUCTURE IS CHANGED; BEFORE GOVERNMENT LESS MEMBERS (7) AS TRADE UNIONS AND EMPLOYEES (8+8), NOW THE SAME

15. GOVERNANCE OF THE INSTITUTE COUNCIL 27 MEMBERS 10 MEMBERS - GOVERNMENT 6 MEMBERS - TRADE UNIONS 4 MEMBERS - EMPLOYERS 5 MEMBERS - PENSIONERS 1 MEMBER - DISABLED 1 MEMBER - STAFF DIRECTOR GENERAL SERVICES OF INSTITUTE

16. COMPULSORY INSURANCE FINACING – FIRST PILLAR • CONTRIBUTIONS EMPLOYEES 15.50 % EMPLOYERS8.85 %2/3 OF BUDGET INSTITUTE • STATE BUDGET1/3 OF BUDGET rights according to special laws and financial means for covering posible loss

17. SELFMANAGEMENT IS NOT UNLIMITED • STATE ASSEMBLY’S DECISION ON CONTRIBUTION RATE LEVEL • GOVERNMENT’S AGREEMENT TO THE FINANCIAL PLAN OF THE INSTITUTE • GOVERNMENT’S AGREEMENT TO THE DIRECTOR GENERAL APPOINTMENT • MINISTER OF LABOUR CAN HOLD ON SOME DECISIONS

18. TRADE UNIONS – PART OF THE SELFMANAGEMENT SYSTEM (1) • RESPONSIBILITY FOR MANAGING IS BIG, BUT LIMITED EXAMPLE ! Proposal on increasing the contribution rate was not accepted by the institut’s assembly because of trade union’s standpoint and actions

19. TRADE UNION – PART OF THE SELFMANAGEMENT SYSTEM (2) • DECIDING BETWEEN PRINCIPALES AND CONCRETE IS HARD EXAMPLE ! not payed contributions – dept withdrawal • TRADE UNION’S REPRESENTATIVES SOMETIMES BETWEEN TWO SIDES (government and pensioners demands) EXAMPLE ! Annual holiday supplement 2005

20. SUCCESFUL WORK IN INSTITUTE’S BODIES – GOOD TO KNOW • BE GOOD PREPARED FOR EVERY MEETING, • LOOKING INFORMATIONS FROM OTHERS IN INSTITUTE AND OUTSIDE, • RECONCILIATING VIEWS AMONG TRADE UNIONS’ REPRESENTATIVES, • LOOKING FOR TRADE UNION’S POLITICAL STANDPOINT BEFORE MAIN STRATEGICAL DECISIONS ARE MADE, • LOBBYING FOR YOUR STANDPOINTS/ PROPOSALS