Supplementary pension schemes, long-term sustaniability of public finances and financial stability in Slovenia

Demographic pressures urge authorities to find solutions for their public pension systems. Supplementary (capital market based) pension schemes have become a prerequisite mechanism for avoiding poverty of nations. In this contribution we stress the need for the Slovenian government to reform the existing embryonic supplementary pension system, which will above all be basedon competitive principles. Besides the well funded collective pillar, we argue that government should introduce individual retirement accounts which would serve as a mechanism to provide individuals with an incentive to save for their retirement use. By accomplishing that, Slovenia would not only solve fiscal pressures stemming from the unsustainable public pension system but would also substantially underpin underdeveloped national financial markets and institutions.