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Ministry Publishes Final Draft for Overhaul of State Funds

Ljubljana, 13 April (STA) - The Finance Ministry released Tuesday the final draft of the bill overhauling the state-run Pension Fund Management (KAD) and Restitution Fund (SOD) as part of efforts to meet OECD membership criteria. The bill will now be debated by the government, expectedly at Thursday's session.

The final draft sticks to the transformation of KAD envisaged in previous draft that would see the supplementary pension business spun-off into a new life insurer owned by KAD. KAD would meanwhile continue to manage the fund of supplementary pension insurance.

While initially proposing a bond issue raising EUR 900m for the pension purse operator ZPIZ, the final draft states that KAD will provide EUR 50m annually to the pension purse. The amount would be indexed to inflation.

Also undergoing restructuring as part of the proposal would be SOD, which would obtain assets from the state-run DSU company related to privatisation and denationalisation. DSU would continue to manage state real estate assets initially but would eventually be phased out.

SOD, which pays out state compensation, foremost in denationalisation cases, would also be phased out in 2016, when the final installment from its bond issue is due. By then SOD will also have to wrap up all procedures related to ownership transformation started by the DSU.

Both KAD and SOD would be limited in handling state assets and would effectively become portfolio investors with a EUR 40m cap on the book value of stakes in any given company. They would also not be allowed to hold more than 5% in any given company.

The proposal, which the ministry says will increase transparency and bring about more efficient management of state assets, must be debated before Slovenia's next hearing before OECD bodies in Paris on 22 April.

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