Fiala: Increasing the age would not apply to people who are close to retirement

Fiala: Increasing the age would not apply to people who are close to retirement

Fiala: People who age should not be affected they are about to retire

From left, Minister of Culture Martin Baxa and Prime Minister Petr Fiala spoke at a press conference after the Prime Minister's balance visit to the Ministry of Culture, February 14, 2023, Prague.

Prague – The considered further increase in the retirement age would not apply to people who are close to retirement. It would possibly affect even workers who have 20 or 30 years until their pension. Demanding professions, which could retire earlier, would also differ. Prime Minister Petr Fiala (ODS) said this at a press conference after his visit to the Ministry of Culture. The retirement age has been gradually increasing for years, usually by two months for men and four months for women per year. At 65, it should stop in the 30s. Experts recommend continuing to slowly move the age limit forward. It would mitigate the financial collapse of the pension system.

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“If we are to raise the retirement age – and it cannot be for people who are before retirement. That is out of the question. We will not go the way they are thinking in France. It would have to be long-term for people who will retire maybe in 20, 30 years – so we have to distinguish between those who can work a little longer and those who are in demanding professions and cannot work a little longer,” said Fiala.

In the program statement, the government promises to “enable earlier retirements for employees in demanding professions for greater employer responsibilities”. The Ministry of Labor is now examining who could benefit from an early pension without a reduction in the amount. Until now, miners could retire earlier. Since this year, rescue workers and company firefighters have joined them, and their employers' contributions will gradually rise from 21.5 percent to 26.5 percent.

Men and childless women should reach the age limit of 65 in their early 30s. For mothers who retire earlier due to the number of children, the age of up to 65 should be equalized by roughly 2036. The Organization for Economic Cooperation and Development (OECD) has repeatedly recommended that the Czech Republic continue to increase in line with life expectancy. According to a four-year-old report by the Ministry of Labor on the state of the pension system, the age shift would help to reduce indebtedness.

The document mentions a delay of one year per decade since the 1930s, i.e. an average of about five weeks per year. Thus, people would start to retire at the age of 66 in their 40s. It would apply for the first time to those born in 1979. People born in 1992, i.e. in the 50s, would receive a pension at 67, according to the department's report.

According to the Prime Minister, the pension reform must include several parameters. In addition to age, it is also the amount of contributions or the ratio of the pension to the average wage. Pensions are not sustainable as they are currently set up. Fiala stated that the Czech Republic is thus faced with the necessity of carrying out the reform. He pointed out that it should have been done by the previous governments.

“We will try to adjust all those things so that they are socially sustainable, financially sustainable, so that it meets the basic goal that I expect from the pension reform, so that we can to look people under 40 in the eyes and say: You too will have a decent pension. If we continue and do nothing the way our predecessors did, young people simply will not have a decent pension,” said the Prime Minister. He added that the coalition will discuss the proposals with the opposition, and then publish the parameters. A public debate should follow.