The battle over the comprehensive reform of Slovenia’s pension system is shaping up to be one of the small country’s defining political struggles of the decade.

The overhaul of the pension system in Slovenia, an EU country with a population of slightly over 2mn, has been discussed for years as a response to the country’s ageing population. However, the reform, hailed by the government as a long-overdue step towards securing sustainable public finances, is seen by critics as an unfair burden on workers. They are now demanding a referendum. 

A system under strain

Pensions are more than just monthly cheques; they are a lifeline for retirees and a promise that decades of work will be rewarded with dignity. Yet, like many European nations, Slovenia is facing the heavy weight of demographic change.

The country’s population is ageing rapidly, driven by decades of low fertility and rising life expectancy. According to OECD projections, public pension expenditure, which accounted for about 10% of GDP in 2019, could climb to nearly 16% by 2050 — making Slovenia the second-highest spender on pensions in the EU after Italy. Without reforms, these costs could strain the state budget, forcing higher taxes, cuts in other public services, or both.

Economist and university professor Mojmir Mrak explained to bne IntelliNews that the reform’s main objective is to address ageing pressures.

“The reform aims to address demographic challenges, ensure the long-term sustainability of the pension system, and provide higher and fairer pensions, especially for those with long careers and for vulnerable groups,” Mrak said in a comment.

Mrak added that the reform increases the retirement age as well as the pension accrual rate, adjusts the indexation formula for increases, and keeps contribution rates unchanged. Implementation will start in 2026 and all major changes should be phased in by 2035.

What will change

At its core, the reform guarantees that workers with 40 years of service will retire with a pension equal to 70% of their average salary, a marked improvement over the current system. Vulnerable groups such as disabled pensioners, widows and those in physically demanding jobs will receive stronger protections, according to the labour ministry.

Other provisions include a gradual increase in the retirement age to 62 for women and 67 for men by 2035, the extension of the pension reference period from 24 to 40 years (excluding the five lowest), and a new winter bonus rising to €250 annually by 2030. Rules for vocational rehabilitation will also be simplified.

Explaining the reasons for the reforms, the ministry said in a Facebook post: “The balance between workers and pensioners is becoming increasingly strained. At present, one in five citizens is over 65, and in 35 years’ time, nearly one in three will be.”

Not everyone welcomed the news. Commenting under the ministry’s post, one woman complained that raising the retirement age by two years would force people to work longer, only to enjoy their pensions for a shorter period.

Prime Minister Robert Golob countered that the reform strikes a fair balance. “The whole pension reform is aimed at ensuring sustainable public finances on the one hand, and on the other hand at ensuring that new pensioners who will retire in the next few years will receive as decent a pension as possible,” he said.

A compromise, not a cure-all

While the reform has been described as historic, experts caution that it is not perfect.

“My overall assessment is that taking into account the demographic trends of Slovenia, it is welcome that the pension reform was finally adopted. As usually happens with politically sensitive structural reforms in Slovenia, the final version of the new pension reform is also a compromise,” Mrak said.

“Personally, I would be in favour of fiscally more ambitious reform and of a reform that would include stimulus for development of the pension system’s second pillar.” 

The second pillar, or supplementary pension savings, remains underdeveloped in Slovenia compared with other EU states. Strengthening it could relieve some pressure on the state system, but it requires political will and public trust.

Workers push back

Not everyone shares the government’s enthusiasm. In May 2025, unions and civil society groups in Slovenia formed the Workers’ Coalition (Delavska koalicija) to oppose the reform. They argue the package unfairly punishes workers while letting employers off the hook.

In a comment to bne IntelliNews, the coalition criticised the reform for raising the retirement age and reducing future pension benefits. Under the proposed changes, the retirement age would gradually increase from 60 to 62 for those with 40 years of service, and from 65 to 67 for those with shorter work records.

“This is unacceptable for workers in many fields. In addition, the reform will punish those precarious workers who have had unequal incomes throughout their careers, as it expands the period for calculating pensions from 24 best years of a worker's career to 35 years, effectively lowering their pensions,” the coalition said.

The coalition also warned that the reform’s mechanism for adjusting pensions over time would erode retirees’ purchasing power. Although the calculation rate is set to rise nominally, future adjustments will be linked more to inflation (80%) than to salaries (20%), resulting in slower growth in pension benefits.

Union representatives accused employers of shirking responsibility for the system’s sustainability. Workers currently contribute 15.5% of their wages into the pension fund, compared to 8.85% paid by employers. According to Delavska koalicija, employers benefited from a government-approved reduction in their share in 1996, which was originally meant to be temporary.

“Had employers restored their contributions to the previous level and contributed equally as labour does, there would be no need for a pension reform at all,” the coalition said.

Calling the reform unfair and imbalanced, the group insisted that workers are being forced to retire later for weaker pensions while capital avoids its share of the burden.

The group has launched a referendum initiative, starting with the collection of 2,500 signatures to file the request, followed by another 40,000 to force a national vote. They are confident that workers, given the chance, will reject the reform at the ballot box.

“So far, they [workers] have not had their voice heard in the matter,” the coalition said.

In the meantime, the Workers’ Coalition said on September 26 that it had completed the first phase of collecting signatures against the pension reform, submitting 10,000 signatures to the parliament, four times the required 2,500. The group described the effort as a joint achievement made possible by the commitment of its supporters. “We have shown that there are many of us and that we are capable of coming together,” the coalition noted.

Comparisons in Europe

Slovenia is not alone in facing this dilemma. Across Europe, countries are pushing through unpopular pension reforms to cope with ageing populations. France, despite months of protests and strikes, raised the retirement age from 62 to 64 in 2023. Austria has tied retirement age increases to life expectancy. Germany and Sweden, with much higher employment rates among older workers, offer models of later retirement combined with strong second-pillar pension schemes.

In comparison, Slovenia’s effective retirement age remains low. Only 25% of Slovenians aged 60 to 64 were employed in 2019, far below the OECD average and countries like Germany (41%) and Sweden (58%). Without measures to encourage longer working lives, the system’s sustainability will remain fragile.

The OECD has repeatedly warned that without reform, Slovenia would face unsustainable pension spending. Its recommendations included raising the minimum retirement age, linking it to life expectancy, and shifting from wage-based to price-based pension indexation. The current reform incorporates some of these suggestions.

A nation divided

For many Slovenians, the debate is not just about percentages and formulas, but about fairness and trust. Workers who have spent decades in factories, hospitals or construction sites fear being forced to work longer despite declining health.

On the other hand, economists argue that without reform, the system could collapse, leaving future retirees with even less security.

The pension reform is set to roll out gradually from 2026 in the next 20 years, but its fate is far from certain. The Workers’ Coalition’s referendum push could stall or reverse it, while demographic and fiscal pressures continue to mount.

Slovenia’s path reflects the broader European challenge: how to preserve intergenerational fairness in an ageing society. The compromise reached in Ljubljana may not satisfy all sides, but it marks a step — however contested — towards confronting one of the country’s most pressing challenges.