Parliament receives multifund bill allowing younger workers' pension savings to be invested more riskily
Draft amendments create three age‑based portfolios with higher equity caps for growth funds, while keeping conservative options for those near retirement.
A bill to introduce multifunds for the second, mandatory pension pillar has been submitted to Parliament, proposing that contributions of younger workers may be invested in higher‑risk portfolios to seek larger returns while protecting the savings of those near retirement.
The draft amendments would replace the current single set of investment rules with three distinct portfolios — growth, balanced and conservative — and let members choose according to age groups. The proposed changes say: "An insured person aged up to 45 years of life may choose a growth or balanced portfolio; an insured person aged from 45 years to 57 years of life may choose a growth, balanced or conservative portfolio; and an insured person aged over 57 years of life may choose a balanced or conservative portfolio."
Higher equity limits for growth portfolios
Under the existing law foreign equities may account for up to 30% of a fund's assets. The draft law would raise that cap for the growth portfolio to 60%, for the balanced portfolio to 45% and for the conservative portfolio to 15%. For domestic equities, current limits of up to 30% would be split by portfolio at 40% (growth), 30% (balanced) and 10% (conservative).
More than €3.5 billion is currently held in the second pillar by over 643,000 members. The average annual return is about 5.5%, a level that casts doubt on the size of future pensions. Private pension companies have pushed for multifunds and expect returns to rise by between 1.5 and 3 percentage points, though some economists warn the change is not a magic solution for the pension system's challenges.
The second pillar was introduced in 2006 to channel a portion of workers' social contributions into privately managed investments over time. Today, roughly two thirds of mandatory contributions go to the state PIOM and about one third to the second pillar. The bill now enters parliamentary procedures for further debate and potential amendment.
Photo: press material from the event
