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Pension reform proposal
Pension? What is a pension anyway? What is a pension for? Now that we are adopting a pension reform, these are very important questions that we need to answer honestly, because only by clearly defining pensions will we be able to build a good pension system.
In my view, a pension is a source of income for the time when a person can no longer work because of old age. This means that when a person enters retirement, he or she is actually unable to do regular work because of physical or mental exhaustion.  If we decided to have such a strict retirement condition, then we would not have what is happening in the current system, for example, when fresh pensioners who have done mainly physical work are still happily skiing, running marathons and similar activities which indicate that the person is actually still able to work.
If we set a person's retirement time according to his or her ability to work, we need to regulate this in a system that ensures that this is done in a fair way.  The system can be divided into three tiers to ensure fairness and stability of the pension fund.
The first tier of the system operates at the individual's workplace itself. This means that jobs must allow the individual to want to work for longer and indeed to leave the job when he or she is no longer able to work. If jobs were really that good, individuals would want to stay longer and the pension system would work perfectly. However, since we all know that this is not going to happen, either on the employers' side or on the people's side (they all want to retire as soon as possible), we need to introduce a second tier of the system.
The second tier of the system calculates the so-called attrition factor of each worker. The attrition factor is a numerical value that represents a worker's capacity to work. It is calculated on the basis of length of service, type of job (higher factor for more difficult jobs), sick leave, etc. The lower the value of the factor, the more able the worker is to work, and conversely the higher the value, the less able the worker is to work. This factor allows workers to be ranked in a retirement list, with those with the highest factor at the top of the list and those with the lowest at the bottom. The next step is to decide the retirement threshold. This threshold is determined by the third part of the system.
The third part of the system determines the retirement threshold, i.e. it determines the level of the exhaustion factor that a worker has to reach in order to be able to retire. The retirement threshold is variable, which makes it possible to control the inflow of pensioners and thus allows the stability of the pension fund. I propose that this threshold be set on the basis of the ratio between the number of pensioners and the number of workers. It used to be that the ratio of pensioners to workers was 1:3, i.e. three workers worked for one pensioner, whereas today the ratio is much worse and threatens the stability of the pension fund. Assuming that a ratio of 3:1 is necessary for the stability of the pension fund, this would mean that the retirement threshold is adjusted so that this ratio is guaranteed. If there are too few pensioners, the threshold is lowered and if there are too many pensioners, the threshold is raised. For today, this definitely means raising the threshold, because the ratio is poor and threatens the pension coffers.
The level of the pension would be determined in relative terms. All the contributions paid in each month by the current generation of employees would represent a certain amount of money that would have to be divided among the pensioners each month. The money would be distributed to pensioners as follows. Each pensioner who has paid contributions during his or her working life has thus paid in a certain amount of money. When we add up all these contributions from all pensioners, we can determine what proportion one pensioner's contributions represent of the total mass of contributions paid. This ratio would then determine how much of the money paid in by employees through their contributions goes to each pensioner. If we go to a welfare state, we can set a minimum pension, and any difference that arises is made up proportionately by pensioners with a pension higher than the minimum. Since the ratio of pensioners to workers would be the same and since the money flow depends on the current wages of workers, pensions would already be automatically aligned with wage growth. The system is very stable because it depends on the current economic situation, which means that if the economy is doing badly, everyone is doing worse, and vice versa, if the economy is booming, everyone's wallet is affected.


The proposal is only a draft, but I believe that I have made a proposal that basically guarantees the stability of the pension fund by allowing the number of pensioners to be regulated, which is extremely important in this day and age, because the economic situation is changing rapidly. It also ensures fair retirement by setting the exhaustion factor fairly.
LP Marko