Austrian: Each party in the coalition has a different formula for slowing the valorization of pensions

Austrian: Each party in the coalition has a different formula for slowing the valorization of pensions

Rakušan: Each party in the coalition has a different formula to slow down the valorization of pensions ;

Illustration photo – Deputy Prime Minister and Minister of the Interior Vít Rakušan at a press conference in Prague after the government meeting, February 22, 2023.

Prague – Every party and movement in the governing coalition has a different formula to slow future pension growth. It is necessary to find a compromise so that it is also acceptable to the opposition and that it is not canceled in the following years after possible success in the elections. Deputy Prime Minister and chairman of the STAN government movement Vít Rakušan said this today in the CNN Prima News TV show Partie. The National Economic Council of the Government (NERV) recommends slowing down valuations to manage indebtedness. According to Minister of Labor Marian Jurečka (KDU-ČSL), the government should discuss the amendment with the new model of increasing pensions in a few weeks.

Advertisement'; }

“Each movement, each party in the coalition of five has a slightly different formula… We have an exact idea with which we are going to the meeting, but first we will tell our colleagues. The main thing is to come up with a compromise that will be acceptable to the opposition as well , when he won't be torpedoed by the media,” said the Austrian. He called on the opposition to negotiate with the coalition representatives.

In due course, pensions now increase every time from January by the increase in prices and half of the increase in real wages. In an extraordinary term, the percentage of the merit portion of the pension is raised after the increase in prices for the monitored period exceeds five percent. The Austrian did not bring his STAN movement's proposal to slow down future additions. At Friday's press conference, Labor Minister Jurečka did not want to be more specific either. He said only that he wanted to discuss the proposals with the opposition, unions and employers in the coming weeks.

NERV already proposed last year to return to a growth rate of one-third of real wage growth with proper valorization. Czech Television recently reported that in the event of an extraordinary increase, according to the Ministry of Labour's internal document, pensioners could either receive a contribution of 5,000 crowns, or only half of the price increase would be taken into account, or extraordinary pensions would not be increased and the price increase would be additionally taken into account in normal growth pensions in January.

According to the approved budget, this year pension expenses exceed income from insurance premiums by 62.5 billion crowns. This amount does not yet include the extraordinary June valorization. The government enforced its reduction. This year, the extraordinary addition has 19 billion crowns less to pay off, i.e. 15.4 billion crowns instead of 34.4 billion crowns. By 2030, after all subsequent valuations, the difference would increase to 250 billion crowns, according to the National Budget Council.

In June, the average old-age pension will increase by an extraordinary 760 crowns due to inflation. The merit-based part of the pension will increase by 2.3 percent and by another 400 crowns. It is more advantageous for lower pensions. According to the original formula, it would be 1770 crowns. The merit portion would grow by 11.5 percent.