The Commission for Pension Reform debated the promotion of saving for old age

The Commission for Pension Reform debated the promotion of saving for old age
The Commission for Pension Reform debated the promotion of saving for old age

Prague – The Pension Reform Commission today continued the debate on the support of voluntary savings for old age, which it started before the summer holidays. She also discussed changes in the public pension system, or the first pillar, into which contributions flow and from which pensions are paid.

“The advisory team for the pension reform dealt with defining the main goals and general principles of the pension reform so that they were in line with the government’s program statement and at the same time took into account the OECD recommendations. The basic solidarity pillar of the pension system was discussed, in particular the guaranteed amount of the old-age pension, with with regard to the overall long-term sustainability of the entire pension system,” the commission said today.

In addition, the topic was simplification and greater comprehensibility of the system for the general public. The advisory team also debated maintaining the incentive for lifelong employment through rewarding longer participation in the system.

The pension advisory team was established by Minister of Labor Marian Jurečka (KDU-ČSL) at the beginning of April. The commission, which consists of representatives of coalition parties, ministries of labor and finance, and economists, has met three times so far. In addition to proposals to support savings, she discussed the reduction of contributions for part-time workers or motivational tools to work at retirement age.

The Ministry of Labor said on its website after the latest meeting that the role of private retirement savings as a source of income in retirement will grow in the coming decades, people should save more and withdraw money saved in regular installments as a pension, not in a lump sum. State support for savings in the so-called third pillar could change, and the Ministry of Finance is also preparing long-term investment accounts with tax benefits, the Ministry of Labor announced.

According to Deputy Minister of Labor for Social Insurance and Benefits Ivy Merhautová (KDU-ČSL), there is a consensus that voluntary savings for old age need to be strengthened and made more efficient. Adviser to the Minister of Finance Lenka Kohoutová (ODS) emphasized that the changes must be sustainable in the future and the savings parameters should be set so that as many people as possible save for their old age and even self-employed people get more involved. The politicians did not want to describe the proposed proposals in more detail.

Pension expenses increase every year. The pension system tends to be in a slight surplus only in boom years, falling into deficits when it cools down. During the past crisis, annual deficits exceeded 50 billion crowns in some years. Experts have been pointing out for a long time that without changes the pension system is not sustainable in the future. In the last two election periods, the governments of the time did not implement reform measures during the period of economic growth.

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The article is in Czech

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