STA / M.M. / 11/05/2018, 12:37
The yearly or next year's dilemma of retirement should also take into account the projected growth in the average wage.
At the Institute for Pension and Disability Insurance of Slovenia (ZPIZ), they explained what factors influence whether a more favorable retirement in this year or next year, if the conditions for acquiring the right to old-age or early retirement are fulfilled, is fulfilled. Among other things, the expected growth of the average salary for this year and the tightening of the retirement conditions for insured persons should be taken into account.
As they said on Zpiz, in calculating the pension base, due to the mutual comparability of the base from previous years, they are recalculated to the value of the calendar year before the year for which the valorisation coefficients are determined. When determining the valuation coefficients, the trends in average wages per employee in Slovenia in individual years are taken into account.
Zpiz: Immediate increase in full pension would endanger the normal functioning of the pension system
What should you be careful about?
According to the Macroeconomic Analysis and Development Bureau, the average gross wage in Slovenia will grow by more than 3% this year (the exact percentage will be known on 15 February 2019), which means that the valorisation coefficients will also increase by the same percentage in 2019, for the calculation of bases from previous years for insured persons who will exercise the right to a pension in 2019.
The exercise of the right to a pension in 2019 also means that the basics from this year will also be taken into account for calculating the pension base. In the case that the policyholder has a substantially higher level than the previous years with the policyholder in 2018, they can affect the amount of the pension base in 1/24, they explained, adding that the then-assessed pension in 2019 would be adjusted as the rest.
In January, the lowest pension was 207, and the highest paid out was almost 2,700 euros
What if you decide to retire this year?
If the policyholder decides to exercise the right to a pension this year, according to the notes Ziza for calculating the pension base will not take into account the average of the bases from this year, and the calculation of the bases from previous years will be taken into consideration by the valuation factors calculated on the basis of the average salary in 2017. The old-age pension will be adjusted at the time of the adjustment for this year's reconciliation of pensions – regular reconciliation by 2.2 per cent and an extraordinary adjustment of 1.1 per cent.
The rounding-off of the completed pension period to an additional six months or a full year to policyholders shall increase the deductible percentage. Such an effect will also delay the retirement even with policyholders, irrespective of retirement in this year or the next calendar year, they explained. However, they added that the extension of compulsory insurance by the insureds will mean lower percentages by 2020, since starting on January 1, 2020, a third transitional period of lowering of the percentages will occur for them, in which they will still be more favorable than the final ones, which will be valid after 1 January 2023
Take care too!
The decision to postpone the exercise of the right to a pension can also be influenced by a more favorable valuation of the pension period without the purchase, since every subsequent year of the pension period without a purchase is valued at four percent (up to a maximum of three years). Also, the subsequent exercise of the right to a pension may also be affected by the possibility of requesting a monthly payment of 20 percent of the pension to which the individual would be entitled on the day of its enforcement.
They clarified that the deferral of the exercise of the right to early retirement will reduce the percentage of pension reduction in relation to the missing months up to 65 years of age. In the case of policyholders, in 2018 a reduction in the pension is calculated for each month of missing age, from a maximum of 59 years and from eight months to 64 years. As of 1 January 2019, the old-age retirement age requirement will increase to 60 years, therefore the missing months will be counted from most of this age up to 64 years and six months.
For some policyholders, such as employees in the public sector, the severance pay on retirement is also affected by the decision on the retirement age. In the case of retirement within two months of fulfilling the conditions, three average monthly salaries, and otherwise two average monthly salaries, were explained.