December 28, 2009

CZECH REPUBLIC: Retirement age to be raised for Czechs from January

. PRAGUE, Czech Republic / Ceskenovini / December 28, 2009

The retirement age will start being extended up to 65 years for Czech men and women with one child as from January 2010, under the law drafted by the previous coalition government headed by Mirek Topolanek (Civic Democratic Party (ODS).    
                                                                                                       Former labour and social affairs minister Petr Necas (ODS) was planning another two stages of the reform of the pension system, but he was unable to have them implemented. Necas's successor Petr Simerka in the current interim government of Prime Minister Jan Fischer said fundamental changes could only be prepared by the government that would arise from the spring 2010 general elections. The legislation also extends the time of insurance necessary for a claim to old-age pension to arise and the system of disability pensions will change as well. Another two stages of the pension reform, planned by Necas, involving changes to the system of basic and additional insurance schemes and the opportunity to partially transfer some money from the compulsory insurance to private funds, have not been approved. Necas wants to reopen the debate in the event of success in the elections. He has said he is ready to look for a compromise solution. Under the existing pension system, people in the economically productive age finance old-age pensions, expecting society to offer this to them, too, in their old age. The Social Democrats want to maintain and stabilise the existing system and the Communists prefer it, too. However, the ODS, the Christian Democrats (KDU-CSL) and the new center-right party TOP 09 are of the view that without a thorough reform, the system is untenable as the number of the elderly is rapidly growing. "The modifications may have postponed by some ten years the moment when the expenditure part of the system will rapidly grow," pension system expert Vladimir Bezdek, who chaired a government expert commission in 2005, told CTK earlier. "From the viewpoint of day-to-day politics, ten years is infinity, but from the viewpoint of the pension system it is tomorrow," Bezdek said. Experts in the commission drew up various alternatives of the pension reform commissioned by parliamentary parties. However, the parties have never agreed on any compromise solution. Experts agree that reform is indispensable and many politicians have also spoken about the necessity of changes. Demographers expect the proportion of the elderly in the population to rise significantly in the Czech Republic and to follow the general pattern in EU countries. According to the mid-December statistics, the growth in the number of children, recorded for the last seven years, has stopped in the Czech Republic. If the population number in a country is not to fall in the long run, the total fertility rate (number of children born per woman during her lifetime) must reach at least 2.1. Last year, the figure stood at 1.5 and it fell to 1.49 between January and September this year. [rc] Author: ČTK www.ctk.cz © Copyright 2009 Neris, s.r.o.