The reform of the pension scheme has brought a fundamental change – an option to save for a pension on a private pension account in a pension funds management company PFMC). If you are saving in PFMC, or you are proposing to enter the 2nd pillar, your obligatory contributions for old-age insurance you would pay to the Social Insurance Company in the amount of 18% shall be distributed between the 1st pillar – 9% (paid to the Social Insurance Company) and the 2nd pillar – 9% (saved in the PFMC). Money on your account will be invested and its value will increase through the pension funds in order its value could increase gradually. In this case you will receive your old-age pension from two sources – the first part from the Social Insurance Company (the 1st pillar) and the second one from your money, saved and with its value increased on your personal pension account (the 2nd pillar). Now, more than 1.5 mill. of savers is connected to the 2nd pillar.
The pension asset management company in which you are saving, or you propose to save for your pension, will provide you the following services:
- it keeps your personal pension account
- it manages three various pension funds with different investment strategy, among which you can choose
- it employs qualified employees who invest your money on your personal pension account efficiently
- it shall send a free-of-charge statement from your personal pension fund to you
- it updates the important information on its web-site regularly, e.g. daily evaluation of a value of a pension unit, a status on your personal pension account
- PAMC charges fees for the services provided, the kinds and amount of which is limited by the law.
Now, six pension asset management companies offer the services in Slovakia:
- AEGON d.s.s., a.s.
- Allianz - Slovenská dôchodková správcovská spoločnosť, a.s.
- AXA d.s.s., a.s. (Winterthur d.s.s., a.s. up to March 2007)
- DSS Poštovej banky, d.s.s., a.s.
- ING dôchodková správcovská spoločnosť, a.s.
- VÚB Generali dôchodková správcovská spoločnosť, a.s.
At June 6, 2007 PFMC was/were managing equities of the value 848,465.906 Sk.
Change of PAMC
You will be able to change your PAMC during the time of saving. But, you have to observe the following rules:
- You may change a PAMC only after 24 months after
- incorporation of your first agreement on the old-age pension saving (OAPS agreement) into a register of agreements on OAPS in the Social Insurance Company or
- a date of change of PAMC, which you are transferring from,
- to incorporate your change agreement on OAPS into a register of agreements, you have to conclude a new agreement with a new PAMC and to submit an acceptance certificate
- you can ask a branch of the Social Insurance Company competent according to the place of your permanent residence or temporary residence for an issuing of the acceptance certificate; a fee of SKK 500 is paid for issue of the acceptance certificate, which fee is an income of the Social Insurance Company and it is paid cash at the branch of the Social Insurance Company.
The pension asset management companies compete one another by an amount of fees, quality of their services, or by the revenues achieved in the pension funds. Therefore, it is important to choose a PAMC on the basis of criteria you accept and consider to be right. You may not to omit a fact that for an investing in the pension funds, it is strategic to assess a profitability of the funds from the long-time aspect, not within a horizon of few years.
You may change your pension fund within your pension asset management company anytime and free-of-charge, the only one limitation is your age. (See pension funds)
Transfers between PAMCs are governed by the law. A saver may change PAMC only upon two years from the date, to which his/her first agreement on OAPS was incorporated in the register of agreements on OAPS kept by the Social Insurance Company or from the date of a transfer to the PAMC, which the saver is transferring from. The saver, who makes a decision about the change of PAMC, will have to ask a branch of the Social Insurance Company for an issue of an acceptance certificate for which he/she shall pay a fee of 500 SKK to the Social Insurance Company. A successiveness of the steps at the change of PAMC is as it follows:
- you will visit a branch of the Social Insurance Company in the place of your permanent (temporary) residence
- the Social Insurance Company shall make out an acceptation certificate to you
- you will pay the amount of SKK 500 for the acceptation certificate to the Social Insurance Company
- you will submit the acceptation certificate confirmed along with a new – transfer agreement on OAPS in a PAMC, which you are wanting transfer to
- you will receive a notice from new PAMC about the fact you have become its client.
Note: In cases, where due to failure to meet the legal conditions it is not possible to issue an acceptation certificate, its issue is free-of-charge. If all the conditions are met, the appropriate branch will issue an acceptation certificate immediately.
An institute of a broker of old-age pension saving was left out from the law on January 1, 2007. To this date, the persons interested in the saving in the 2nd pillar could conclude an agreement on old-age pension saving only by a broker having the relevant permit from the National Bank of Slovakia (NBS). From the beginning of this year, the persons interested in saving in the 2nd pillar can conclude a new agreement on OAPS, as well as transfer agreement, exclusively by an employer of a PAMC.