New increase in Czech pensions and its impacts
Czech government announced a change in the composition of pensions earlier this month. Photo: Pixabay
by Anastasia Alexandridou
Brno, Feb 27 (BD) – The good news is that the change will bring growth in the fixed sum, which is the same for all recipients. More specifically, in 2017 the fixed sum of pensions was 9% of the average salary in the Czech Republic. In 2018, the fixed sum should reach 10%, according to Jan Velinger correspondent at Radio Praha.
“The Czech pension scheme has two components: a fixed sum pension and an earnings-related part. The flat-rate fixed sum part provides all entitled citizens with a basic pension. The earnings-related component has a strong redistributive character,” reads Wilmington plc’s Pension Funds Online.
“The change will raise lower pensions while slowing down increases in roughly one-half of all pensions,” said Labour and Social Affairs Minister Jaroslava Němcová according to February 26’s Prague Daily Monitor.
At the end of 2017, the Czech Social Security Administration (CSSZ) paid old age pensions to over 2.4 million people (the Czech Republic has around 10.5 million inhabitants), with an average sum of CZK 11,850, according to Daily Monitor.
The latest change in September 2017 brought CZK 368 more to each Czech pensioner monthly (just under 15€).
Czech men retire at 63 years, while childless Czech women retire at 62 years, and mothers of children even earlier, Daily Monitor writes.
The poverty line for 2013 was set at CZK 116,093 per year or CZK 9,674 per month. 9% of all old age pensioner households [starobní důchodci] fell below the poverty line in 2013 and 2014, according to the Czech Statistical Office’s (CZSO) data.