The proposed legislation aimed at reforming the second pension pillar has reached Parliament. It provides for citizens’ savings to be invested in three risk categories: high, medium and low. The initiative also includes an age-based division, so that the investment strategy corresponds to the number of years each contributor has left until retirement.
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The second pension pillar operates by allocating part of employees’ contributions to individual accounts, which are then managed by licensed pension companies to generate long-term savings. Under the new draft law, these investments will be structured across three risk levels, giving citizens the opportunity to choose according to their own profile.
Under the proposed provisions, people under the age of 45 will have two alternatives: high- or medium-risk investments. Those aged between 45 and 57 will have access to all three risk levels, while people over the age of 57 will be limited to medium- or low-risk options.
For the group under 45, a choice between high and medium risk is envisaged. Those aged 45–57 will be offered all three levels, while for people over 57, only medium and low risk will remain available.
High-risk investments offer the potential for greater returns, but also carry the possibility of significant losses. Medium-risk investments aim to balance the potential for returns with exposure to risk, while the low-risk category is primarily intended to preserve the stability of savings, without guaranteeing a profit. Fund management will remain in the hands of licensed pension companies, while MAPAS will oversee compliance with the rules. Data published in October show that mandatory pension funds had more than 643,000 members, with a total accumulated value of around 218 billion denars, equivalent to approximately 3.5 billion euros.
The new draft law must now go through parliamentary procedures. If approved, the new system will give citizens the opportunity to have their pension savings invested in different ways, in line with their age and the level of risk they are willing to accept. However, higher returns are not guaranteed, and higher-risk investments may also result in losses./Alsat/
