Focus groups reveal the biggest challenges for Slovenia’s pension systemAdriatic Journal 20 August 2018
Slovenian politicians will have to deal with a major task in the near future: a comprehensive reform of the pension system as the current one does not take into account the aging population. This is the main conclusion of the research conducted recently by the Institute for Strategic Solutions (ISR). Within the framework of the project about key demographic challenges in Slovenia, ISR also organised workshops across the country in which different representative groups of people took part. Here are the key findings about their perspective on demography and challenges linked to it.
Three groups of people took part in the workshops: pensioners, those in full-time employment and students. The purpose was to determine what aspects appear to be the most important for each of the group when talking about life in old age. Each group viewed aging with a different perspective. Retirees emphasised stress, illness, dementia, falling in love, and all-round life and work concerns while the working people highlighted financial issues and fear of scarcity. Students, on the other hand, mentioned society, intergenerational cooperation and coexistence as the most important concepts, and thus showed most solidarity of the three groups involved.
Based on the participants’ answers, it is evident from the graph below what words or phrases are mostly associated with life in old age.
The higher the word is placed on the axis ‘y’, the greater its association with aging based on the participants’ perspective. Axis ‘x’ shows the degree of uncertainty when considering the impact of a particular factor on demographics.
According to participants, majority of uncertainties are connected with the lack of ideas and reforms that the government should adopt to ensure its citizens are healthy, safe, happy and financially secure in their old age.
Project Challenges of the Future has shown that, in terms of the demographic challenges, we can consider four scenarios:
1. Intergenerational cooperation
This scenario highlights the importance of intergenerational cooperation in addressing the challenges of a rapidly aging population. The scenario also draws attention to the urgent need for cooperation between the state and society in addressing demographic challenges in regards to life in old age.
The key challenge under this scenario is to increase the government’s awareness of the importance of demographics. Nine out of 10 participants think that a decent pension should be taken care of by the state. The same proportion thinks that pensions in Slovenia are not high enough. This scenario reflects the perspective that focuses on solidarity and collectivism.
Participants have raised fears that their old age will not be financially secure because pensions will be too low. In this scenario, one out of two participants considers that an individual must take care of his or her own pension – in contrast to the first scenario, where the vast majority expects the state to be the provider.
The concepts of money and fear have a significant impact on this scenario. Although we are in a period of economic growth, the general population does not feel its positive effects. The view is that life is becoming more expensive while salaries remain at the same level. The issue of pension causes anxiety and drives the search for alternative ways to save for old age. In this scenario, insurance companies play an important role. This is a scenario that focuses on the needs and aspirations of the individual rather than the interests of the society as a whole.
This scenario has two sides – on the one hand, aging is seen in a positive light: as an individual’s opportunity to enjoy and live a full life in the process. On the other hand, aging represents stress and health problems. Those were the views from the older participants, while the younger ones focused on improving the situation in the future.
Why is the term “opportunity” mentioned here? Because this scenario is based on a conscious decision by an individual whether his or her old age will be marked by stress and other negative factors associated with aging, or he or she will live a full and active life in retirement. Opportunities depend on the creation of a dominant social consensus and the measures taken by the state. According to the participants’ views, relevant infrastructure is important in this regard, which should provide a carefree old age.
The participants also saw opportunities in solidarity; care for family members; overcoming intergenerational differences; digital literacy of older people; and social entrepreneurship.
This scenario arises from the concerns of people in employment and those who are just about to enter the labour market. The concerns relate to the job security, income levels, general prosperity and decent savings for old age. The prevailing opinion amongst the participants is that pensions are not high enough and that rapid aging of the population has a negative impact on the economy and society as a whole.
This scenario, based on the responses from the workshops, is the most likely one. The participants thought that pension and health funds are overburdened and require a greater financial boost, which means they will have to be reformed. Participants also worry about what they will do after retiring, they are afraid of having a small pension, and thus fear poverty and deprivation. The young people also highlighted feelings of neglect and exclusion in the labour market. Both young people and those in employment believe that older people are more employable than them.
The scenario suggests it is not too late for the government to take measures that will improve the quality of life for both the elderly and the working population, including through lowering tax burdens and raising wages. ISR notes that the social consensus on intergenerational solidarity, especially amongst young people, is already well established, while this is still not reflected in the economic and political reforms.