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Parliament Passes Pension Reform (II)

Ljubljana, 14 December (STA) - The National Assembly passed the government-sponsored pension reform act in a 49:35 vote on Tuesday, gradually raising the full-pension retirement age to 65 by 2026 in a bid to put the pension system on a sustainable footing.

Passage of the law, which is set to take effect on 1 January, marks the culmination of months of bitter fighting with unions, which wanted to secure better retirement conditions for blue-collar workers who start working at a younger age.

In a nod to union concerns that manual labourers would not be able to work until 65, the law stipulates that men with 40 years of service will be able to retire on full benefits at 60 and women with 38 years of service at 58.

At the same time, the law attempts to promote hiring by introducing relief for employers hiring first-time job seekers on permanent contracts, giving them a 50% break on social security contributions for the first year of employment and 30% for the second year.

Labour, Family and Social Affairs Minister Ivan Svetlik was "quite surprised" that the coalition mustered enough votes, saying that some had managed to put politics aside so that reason prevailed.

The law was passed with the help of the opposition People's Party (SLS) and the group of unaffiliated MPs, as the coalition Pensioners' Party (DeSUS) voted against after failing to secure higher indexation of pensions in an emergency law for 2011.

SLS president Radovan Zerjav said his party had not set out to save the coalition, it merely backed a good reform proposal.

The main opposition Democrats (SDS) meanwhile conceded in the debate that pension reform is necessary, but they said the way the government did it was not appropriate.

Even though the government back-tracked from its original proposal, which would have raised the retirement age to 65 without exemptions, the fate of the law remains uncertain as the unions insist on putting it to referendum.

Dusan Semolic, the head of the ZSSS union confederation, told the STA that his group would first seek an upper chamber veto and then seek a referendum.

The Association of Employers welcomed the law, but its president Joze Smole said he doubted the law would take effect as planned considering opposition from the unions.

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