At the extraordinary cabinet meeting held yesterday, the government decided to suspend state contributions to the second pension pillar for two years. The people who have joined the funded pension programme can continue making contributions if they wish.

The state will suspend its contributions as of 1 June this year. The Ministry of Finance will attempt to bring respective amendments of legislation to the government on Thursday of this week. According to the decision of the government, the state will continue partial contributions in the year 2011. Then the state will start paying 2 per cent to the second pension pillar and the citizen will pay one per cent. Ordinary contributions (2+4) will continue in 2012.

To the people who continue making contributions to their funded pension during the period of grace by the state, the state will pay six per cent to their second pension pillar instead of the four under certain conditions of economic growth. The Ministry of Finance will elaborate more specific conditions by Thursday.

For the years when the state contributions to the second pillar are suspended, the future pensioners will receive a somewhat higher national or first pillar pension.

Currently, a person who has joined the mandatory funded pension programme pays 2 per cent of their wages when making a contribution, to which the state will add another 4 per cent for the social tax paid for that person. More than 580 thousand people have joined the funds.