This master's thesis describes the pension system in Slovenia, analyses the sensitivity of the pensionable service and the influence of the pension amount in the PAYG system considering unemployment and the time of entry into and exit from the labour market. The thesis focuses on three pension system indicators, namely the pensionable service, retirement age and vested percentage for pension assessment. Seven different simulations of the entry into and exit from the labour market are used to review how the three indicators react to changes in input parameters.
The first part of the thesis presents the types of pension systems with the focus on the PAYG system because it is the basis for the simulations in the main part of the thesis. The current issues of pension systems and the causes of difficulties in financing the PAYG system are described and analysed.
The second part describes the past development of the pension system in Slovenia. The focus is on the latest pension reform, adopted in 2012, which gradually tightens the retirement conditions. In addition, the three pillars of the pension system, with the focus on the first pillar, are introduced. The status of PAYG system and old age pensions are described.
The third, main part, introduces the population groups included in the simulation. The value of the input parameters in the medium variant of projections are calculated and defined using our assumptions based on data from various Slovenian and European institutions and scientific papers. The favourable and unfavourable variant are created for each of the input parameters in the medium variant. Finally, the differences in indicator values between population generations within a single variant and between different variants are compared. In addition, the confidence intervals for indicators values in medium variant are calculated and thus variability of results is demonstrated. In this section, scientific methods are used, with an emphasis on statistical and comparative methods, but synthetic and analytical methods are used as well. The statistical methods used are: data collection, compilation and data processing method, and also data display method with numerous graphical and tabular displays.
The final part summarizes the simulation results. The model is evaluated and the suggestions for its improvement are given. The key finding of my work is that due to the late entry into the labuor market and higher unemployment than in the past young people will retire increasingly older in the future than the current generations of pensioners even in the existing pension system, while they will also have fewer years of pensionable service and, consequently, lower pensions. Future pension reforms will probably further tighten the retirement conditions and this will make the retirement even later, if young people are not encouraged to enter the labour market earlier.