The IMF objects to the 10 percent withdrawal from the Trust
The International Monetary Fund has not supported the idea of the Government of Kosovo to withdraw 10 percent of funds from the Pension Savings Fund.
This is because according to this institution, it would affect the reduction of future pensions and would limit the size of the internal capital market.
“The proposed withdrawal of 10 percent of pension savings from the Kosovo Pension Savings Trust (KPST) undermines Pillar 2, reduces future pensions and limits the size of the internal capital market, which has been an essential source of budget funding,” was stated in the concluding statement of the Article IV Mission for 2020 IMF.
The Hoti government has foreseen the withdrawal of 10 percent of the funds from the Trust. He has included this in the Draft Law on Economic Recovery, which has failed six times so far to be voted in the Assembly.
The statement said there was a need to refocus on social spending and current transfers.
“Furthermore, reforms need to be implemented to refocus social spending to protect the most vulnerable. The creation of additional pension benefits on existing schemes without an analysis of the actuarial sustainability of existing benefits should be avoided,” the statement said.