Old Age Pension Savings Scheme
Dôchodkové starobné sporenie
Coverage
Opting in
- Any natural person who is or has been insured in the statutory old age pension scheme and who has not reached the age of 35 can opt in (exception: people who are currently insured in the pension scheme for police officers and soldiers).
- After enrolling in the old age pension savings scheme participants can no longer exit the scheme.
Voluntary insurance
- Persons during unemployment can pay voluntary contributions.
Financing
General finances
- Fully funded scheme with individual retirement accounts financed by contributions and capital revenues (investment returns).
Contribution rates
- Fixed share of monthly gross earnings (5%) with a contribution assessment ceiling (EUR 7,091 in 2020) entirely covered by the employer.
Taxation of contribution payments
- Contribution payments are tax-exempt.
Administration
- The ‘Social Insurance Agency’ is responsible for the approval and acceptance of contracts concluded between the individuals and the pension asset management companies which administer the scheme.
- The ‘Social Insurance Agency’ collects contributions and sends them to pension asset management companies.
- Pension asset management companies are management companies whose object of activity is old age pension savings. They create and manage pension funds for the implementation of old age pension savings, according to Act 43/2004 Coll. on Old Age Pension Savings.1
Qualifying Conditions
- Based on reaching the standard retirement age of the statutory old age pension scheme.
- Entitlement to early retirement pension is possible, based on the fulfilment of qualifying conditions and the entitlement to early pension benefits from the statutory old age pension scheme; in addition, the sum of the early pension from the statutory old age pension scheme and the old age pension savings scheme must be more than 1.2 times the minimum subsistence level as defined by law.
Benefits
Pension payments
- Accumulated capital through contribution payments and investment yields, minus administrative costs/fees of the pension plan provider.
- Life-long annuity (Doživotný dôchodok) paid monthly (using unisex-mortality tables); possibility for yearly instead of monthly benefit payments; option for one-time lump sum payment if the amount of the received pensions from the statutory old age pension scheme and the old age pension savings scheme is lower than the reference amount of EUR 464,60 in 2020; if monthly payments are below threshold, one-time lump sum payment of 100% possible.
- Pension payments depend on the term of pension payment, the biometrical tables, and the technical interest rate (an interest rate derived from actuarial mathematics, used to discount future benefits to determine their present value).
Taxation and social security contributions
- Pension payments are not subject to income tax.
- Pension payments are not subject to social security contributions.
Coverage
Financing
Administration
Qualifying Conditions
Benefits
Opting in
- Any natural person who is or has been insured in the statutory old age pension scheme and who has not reached the age of 35 can opt in (exception: people who are currently insured in the pension scheme for police officers and soldiers).
- After enrolling in the old age pension savings scheme participants can no longer exit the scheme.
Voluntary insurance
- Persons during unemployment can pay voluntary contributions.
General finances
- Fully funded scheme with individual retirement accounts financed by contributions and capital revenues (investment returns).
Contribution rates
- Fixed share of monthly gross earnings (5%) with a contribution assessment ceiling (EUR 7,091 in 2020) entirely covered by the employer.
Taxation of contribution payments
- Contribution payments are tax-exempt.
- The ‘Social Insurance Agency’ is responsible for the approval and acceptance of contracts concluded between the individuals and the pension asset management companies which administer the scheme.
- The ‘Social Insurance Agency’ collects contributions and sends them to pension asset management companies.
- Pension asset management companies are management companies whose object of activity is old age pension savings. They create and manage pension funds for the implementation of old age pension savings, according to Act 43/2004 Coll. on Old Age Pension Savings.1
- Based on reaching the standard retirement age of the statutory old age pension scheme.
- Entitlement to early retirement pension is possible, based on the fulfilment of qualifying conditions and the entitlement to early pension benefits from the statutory old age pension scheme; in addition, the sum of the early pension from the statutory old age pension scheme and the old age pension savings scheme must be more than 1.2 times the minimum subsistence level as defined by law.
Pension payments
- Accumulated capital through contribution payments and investment yields, minus administrative costs/fees of the pension plan provider.
- Life-long annuity (Doživotný dôchodok) paid monthly (using unisex-mortality tables); possibility for yearly instead of monthly benefit payments; option for one-time lump sum payment if the amount of the received pensions from the statutory old age pension scheme and the old age pension savings scheme is lower than the reference amount of EUR 464,60 in 2020; if monthly payments are below threshold, one-time lump sum payment of 100% possible.
- Pension payments depend on the term of pension payment, the biometrical tables, and the technical interest rate (an interest rate derived from actuarial mathematics, used to discount future benefits to determine their present value).
Taxation and social security contributions
- Pension payments are not subject to income tax.
- Pension payments are not subject to social security contributions.
1 The following 5 pension management companies operate in Slovakia: Allianz - Slovenská dôchodková správcovská spoločnosť, a.s.; AXA d.s.s., a.s.; DSS Poštovej banky d.s.s., a.s.; NN dôchodková správcovská spoločnosť, a.s.; VÚB Generali d.s.s., a.s.
Legal Basis: Act No. 43/2004 on Old Age Pension Savings (Zákon o starobnom dôchodkovom sporení).