April 13, 2016 / 1:31 PM / 3 years ago

Slovenian ministry proposes retirement age increase to 67 from 59

BRDO PRI KRANJU, Slovenia, April 13 (Reuters) - Slovenia’s labour ministry on Wednesday proposed raising the retirement age to 67 from 59, in line with a suggestion from the International Monetary Fund.

The ministry said that, without changes, budget spending for pensions would increase to 15.3 percent of GDP by 2060 from 11.8 percent at present — the highest increase among European Union states — due to the rapid ageing of the Slovenian population.

“We suggest a special mechanism according to which retirement age would be automatically adjusted to future demographic trends,” the ministry said in a report on the pension system.

At present the retirement age can only be raised with new laws regardless of constant increasing of life expectancy.

Prime Minister Miro Cerar told reporters later on Wednesday that government had not yet decided when it will prepare a new pension law and pointed out that a previous pension reform, enforced at the start of 2013, was still ongoing.

In line with the 2013 pension reform the retirement age will be gradually raised to 65 by 2019.

The IMF and the European Commission have urged Slovenia to pass a new reform, saying the present pension system is not sustainable in the long run.

Slovenia, which narrowly avoided an international bailout for its banks in 2013, hopes to bring the budget deficit to zero by the end of 2020 from some 2.2 percent of GDP seen this year.

Editing by Raissa Kasolowsky

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