Labour, Social Affairs and the Family Ministry recommends that as many as one million people should take advantage of the current opportunity to leave the private second pillar of the pension system. The option to leave or join the second pillar came into effect as of Sunday, March 15 and will remain open until June 15. If a million people did opt out of the second pillar, there would only be around half a million savers left in it, notes the Pravda daily.
The Government decided to introduce the aforementioned three-month period when it emerged that the first group of people saving with the second pillar to reach retirement age were receiving pensions that were lower than those they would get if they had never signed up to the scheme. "We recommend that anyone with an income up to the average salary should leave, regardless of their age," said Labour Ministry spokesman Michal Stuska. The Ministry has also advised people over 45 who receive more than the average salary to pull out of the private pillar and encourages younger people who earn more than the average salary to think about joining the pillar. Discussions on the advantages of leaving or remaining in the private second pillar of the pension system obscure the real meaning and function of the two-pillar pension scheme wrote the Pension Fund Management Companies Association (ADSS) in their statement. They emphasised that the system is aimed at distributing the risk involved in saving for retirement. The discussions on the issue often fail to recognise the essential goal of the two-pillar system, which is to provide incomes for retirement from two separate and differently functioning sources. The Association further stressed that the two-pillar system brings together the advantages of the first pillar, namely the principle of solidarity and generous state subsidies, with the strong points of the second pillar, including the opportunity for the money saved to be inherited and a merit-based system. It isn't true that the second pillar is only for well-off people, asserted the association, adding that people with low incomes shouldn't rely only on one income when they retire, especially in the view of the fact that the first state-sponsored pillar is facing a serious threat from unfavourable demographic developments. This is the fourth time the government is opening the second pension pillar. A total of 260,000 people left it during the three previous opt-out periods.
