The Impact of Demographic Changes on the Sustainability of the Pension System

Abstract

Social security is an important factor for every society, both for working generations as well as for people in retirement. The pension system in Slovenia is based on an intergenerational agreement. Recently, we have been facing the problem of demographic changes as the number of births is decreasing, while life expectancy is being prolonged. The number of active workers, contributing funds to the pension system, is decreasing, while the number of pensioners receiving pensions is increasing. Due to longer schooling periods, the pursuit of one’s own career, and the emancipation of women, young people
establish their family relatively late, which causes the low birth rate. Sustainability of the pension system is also affected by the high unemployment rate. The Pension and Disability Insurance Law, which entered into force on 1 January 2013, further tightened the conditions for retirement. Therefore, a gap between the contributions of the active working population and claims for pensions will be discussed in the paper, and the main features of a socially sustainable pension system will be identified.