Government approves mandatory employers’ contribution to employees' savings
The pension system reform will bring about a major change for employees in certain high-risk jobs. As they will no longer be able to retire early without their pension being cut, the new law includes the obligation for employers to contribute to selected employees’ retirement savings product. If employees in high-risk jobs decide to retire early, the difference in their pension will thus be compensated.
The government has approved a bill making it mandatory for employers to contribute to retirement savings products for employees in the third category. These are employees who are required to use protective equipment or other protective measures at work. The obligation to contribute to the savings scheme is applicable if the employee works at least three shifts per month. In addition, the conditions for applying for a pre-retirement pension for people doing high-risk work will be relaxed.
Employers will be obliged to inform the employees of their entitlement to such a contribution. Employees will in turn have to inform their employer of their intention to have such a retirement savings product and provide them with an account number to which to deposit the contribution. The contribution amount will be based on the number of shifts worked in each calendar month. If the employee works at least three shifts in a month, they will be entitled to a contribution of 3% of their assessment base; if they work at least 11 shifts in a month, the contribution will be 4% of their assessment base.
Both trade unions and employers' representatives have complained that they were not consulted on the rules for these mandatory contributions and that the regulation was submitted by the deputies instead of the government. They have also pointed to the heavy administrative burden the new law places on those involved in its practical application.