The OECD has urged Slovenia to consider introducing automatic enrolment or employer-matching contributions in occupational pension schemes to boost retirement savings and strengthen the country's second-pillar pension system.

In its latest Economic Survey of Slovenia, the organisation said participation in private funded pensions remains low despite generous tax incentives, limiting both retirement income and the availability of long-term capital for investment.

While welcoming reforms requiring employers with more than 10 employees who do not already offer an occupational pension scheme to begin formal negotiations to introduce one from 2026, the OECD said further measures would be needed to increase coverage.

It pointed to Denmark and Sweden as examples where employer matching contributions and automatic enrolment have helped expand occupational pension participation.

The OECD also argued that stronger funded pensions could play a greater role in supporting economic growth by providing long-term capital for productive investment.

It highlighted low levels of venture capital investment and limited participation by domestic institutional investors, recommending more flexible long-term return guarantees to allow pension funds to increase their exposure to private equity.

According to the report, current guaranteed-return requirements encourage pension funds to hold large allocations to government bonds, limiting their role in capital markets compared with pension funds in other OECD countries.

The OECD also called for greater competition in Slovenia's occupational pension market, arguing that reducing state-owned insurers' ownership of pension funds could help lower fees, improve net returns and attract additional long-term savings.

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