Personal wage point

What it means

The personal wage point shows how an insured person's earnings in a given year compared with the Slovak average wage. It is calculated as their assessment base divided by the general assessment base for the same year. A value of 1 means earnings exactly at the average.

The points for a whole career are averaged into the average personal wage point. That figure is multiplied by the pension insurance period in years and by the current pension value, and the result is the old-age pension. The points thus put earnings from different years on a comparable footing.

Thanks to this mechanism it does not matter that wages thirty years ago were much lower in nominal terms. What counts is the relative position against the average at the time. The law also limits the effect of very high incomes through the assessment base ceiling and reduction coefficients.

How it works in practice

The inputs are the data employers report to the Social Insurance Agency and the pension insurance record. An insured person can request a statement or view it in the electronic services and check that every year and assessment base is recorded correctly.

For sole traders the wage point matters when deciding how much to contribute. Someone who pays only on the minimum assessment base for years earns low points, and the future pension reflects that. Over a long career the gap compared with an employee on the average wage is considerable.

Periods without income, such as maternity or parental leave, need not mean zero points. The state pays contributions for some of them and the law sets special rules, so such years are not counted in the average as a complete gap.

What to watch out for

A missing period in the records, for example because a former employer did not pay contributions or a registration was forgotten, lowers both the average point and the insurance period. It is better dealt with years before retirement, while documents and witnesses still exist.

The wage point does not cover the funded pillar. If the person also saves in the second pillar, part of their income goes to a personal account and the pay-as-you-go pension for those periods is reduced. A sound estimate of future income must look at both pillars together.