The Czech Ministry of Labour and Social Affairs is preparing a draft pension amendment to change the direction of pension policy set by the previous government. Labour Minister Aleš Juchelka (ANO) announced that the key point of the prepared norm will be to cap the retirement age at 65. The amendment could come into force as early as next year, but some of the measures would be introduced gradually.
The current rules foresee a further gradual increase of the retirement age to 67. Under the previous government's reform, this limit would be reached in 2057. However, the new cabinet of ANO, SPD and Motorists wants to stop this trend. According to Juchelka, the emphasis on solidarity is more important than further extending working life.
The changes will also affect the indexation of pensions. The ministry plans to return to a model where pensions are increased by half the growth in real wages, not just by a third as is currently the case. It was the limitation of indexation and the shift in the retirement age that were the main tools of the previous government to slow down the growth of pension spending.
The amendment is to further extend the so-called age valorisation. In addition to an automatic increase of CZK 1,000 at age 85, the pension would be newly increased by CZK 500 at age 80. The ministry is responding to the growing financial burden on the oldest seniors.
A significant part of the proposal is to support working pensioners. Working beyond retirement age would again be reflected in the amount of the pension. The government envisages an increase in the pension by 1.5 percent of the assessment base for each additional year of service. This is a significant change from the previous system, where the increase in the pension for work in retirement was rather symbolic.
The social insurance discount of 6.5 per cent will also remain. Juchelka admits that he does not consider this instrument ideal because it does not directly increase future pensions, but he believes its abolition would harm people who already rely on it. At the same time, the minister rejects the argument that seniors can systematically set aside the money they save.
The proposed changes have drawn criticism from employers and economists alike. They warn of labour shortages and further increases in spending and debt. But the ministry insists that the aim is a clearer and more socially sensitive system.
gnews.cz - GH
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