Old-age pension scheme (second pillar)

In the Slovak pension system, the old-age pension scheme (second pillar) is:

• a funded defined contribution scheme in which the pension savings are managed by pension fund management companies (PFMCs)
• a scheme which, in combination with pension insurance (first pillar), is designed to ensure an income for savers in old age and for their survivors, if any, in the event of their death
• a mandatory scheme with automatic participation, but with the possibility of leave from it till two years from the first participation in the second pillar and at the same time with the right to re-enrol this pillar (however a saver may only once leave and re-enrol)

The old-age pension scheme’s organisation, funding and supervision is governed by the Old-Age Pension Scheme Act.

Supervision – aims, main functions and activities

The second pillar of the Slovak pension system is supervised by Národná banka Slovenska (NBS) in accordance with the Old-Age Pension Scheme Act and the Financial Market Supervision Act.

The purpose of financial market supervision is to contribute to the stability of the financial market as a whole and to the secure and sound functioning of the financial market, with the aim of ensuring financial market credibility, the protection of financial consumers and other financial market customers, and compliance with competition rules.

The main purpose of second-pillar supervision is to monitor the compliance of pension fund management companies (PFMCs) with prudential rules and capital adequacy rules and to monitor the PFMC-managed second-pillar pension funds guaranteeing primarily the safety of savers’ pension savings and the protection of savers’ rights and legally protected interests. Národná banka Slovenska supports the sound development of the second pillar, including a competitive environment within it. At the same time, NBS helps to strengthen public confidence in the pension system and seeks to prevent risks arising in the system.

Off-site supervision One way in which NBS collects and evaluates information and documentation concerning supervised entities, their activities, and other natural or legal persons whose position, transactions or other activity are related to the entities is through off-site supervision, involving mainly the collection and evaluation of information and documentation submitted to NBS at its written request and information reported to NBS by the entities in compliance with their reporting obligations.

On-site supervision NBS also collects information and documentation concerning supervised entities, their activities, and other natural or legal persons whose position, transactions or other activity are related to the entities through on-site supervision, involving the collection of information and documentation from on-site inspections and directly from employees of the entities, as well as the evaluation of the information and documentation so acquired.

Národná banka Slovenska cooperates in the development of financial market regulation and maintains regular dialogue with the different interested parties.

Summaries of the results of NBS on-site inspections conducted at supervised entities can be found here.

Information and notices