The irreplaceable pensioners

Pensions, especially early ones, have become a topic in Slovak public discourse around which not only politicians tread carefully. They engage with them more closely only when they are preparing an above-standard indexation, introducing a new type of pension, or want to defend one against abolition. The new early pension after 40 years worked, which, through a combination of several factors, has recently paid off for an increased number of seniors, has, however, begun to cause problems in industry and transport.

Becoming an early pensioner is today, because of indexation, very advantageous. In the past, approximately 14,500 people a year applied for an early pension. In 2023, by the end of November alone, another 13,500 people joined them, people whom Slovak industry had counted on for at least several more years. At least half of them are leaving industry, where no one will replace them. Many of them are only 57 years old, not to mention the enormous amount of accumulated experience that these workers take with them. This year the same scenario is expected, since pensions will again be indexed by a further 14.5 percent.

A critical situation in transport

This year we expect that at least another 10,000 more people will take early retirement. The situation is particularly acute in transport, which is struggling with a shortage of drivers. The Bus Transport Association estimates that approximately 200 drivers in suburban transport will be lost. Each of them carries on average 50,000 passengers a year. Together that amounts to 10 million passengers. To give an idea, it is a situation as if intercity connections were eliminated in several districts at once. These are employees who cannot get to work, or students who cannot get to school, especially in smaller towns and villages. Already today transport services are being reduced, which has a direct impact on the state economy.

A similar situation prevails in rail transport as well. The company ZSSK Cargo will, as a result of early retirements, lose approximately nine percent of its employees, who under other circumstances could still be working. Among the most endangered positions are wagon masters and locomotive drivers, who cannot simply be replaced by retrained employees. Thousands of drivers are missing in freight transport.

Temporary solutions

Correct solutions tend to be complex and involve both a short-term and a long-term vision. So what should be done while the long-term solution – in the form of increasing the attractiveness of transport occupations, or even the automation of this sector – takes effect? Besides abolishing the early pension after 40 years, which suggests itself, there is reducing the attractiveness of early pensions through a more significant cut in the pension amount to a level of 1.5 percent for each month of earlier departure. A third option, which APZD considers the most preferable, is increasing the amount that an early pensioner may earn. At present it is 2,400 euros a year. If, however, it were increased to the amount of the average monthly wage in the economy, it would be worth it for early pensioners to keep working alongside drawing their pension.

Measures such as the frequently mentioned national visas can help stabilise the situation. It is, however, necessary to make certain changes. In the event that the favourable conditions of early pensions remain in place, it is at least desirable to simplify the conditions for obtaining national visas. The missing early pensioners could then be partially replaced by foreign labour. It is also necessary to shorten the period during which an employer must have been established in Slovakia, from the current ten years to four years. Especially if, at the same time, the conditions for obtaining driving licences of categories C, CE, D and DE were eased, which would allow retrained labour to be involved as well.