< /p> Minister of Labor and Social Affairs Marian Jurečka at a meeting at the labor office, February 13, 2023, Nový Jičín.
Prague – Minister of Labor Marian Jurečka (KDU-ČSL) plans to reduce valuations for above-average pensions. He wants to limit the “opening of the scissors” between higher and lower pensions. He also wants to find a way to help those who receive a very low amount. He wants to publish the pension system reform proposal in March. Jurečka said this today at a press conference in Nové Jičín.
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At the end of last year, almost 2.37 million people received old-age pensions from the Czech Social Security Administration. The average amount was 18,061 crowns in December. At the end of last year, roughly 1.3 million senior citizens received more than 18,000 crowns. A total of 397,900 people received less than 15,000 crowns, of which about 55,400 did not even have 10,000 crowns. Years of service and the amount of contributions from earnings are reflected in the amount of the pension.
“I definitely want to make sure that the gap between old-age pensioners does not open any further… The current valorization mechanism really creates for us that inflation affects people with a lower pension much more heavily than people with above-average pensions. I will be part of this mechanism want to join. We will want to reduce the amount of valorization for people with above-average pensions and at the same time look for a way to help those with very low pensions,” Jurečka said today.
According to experts, the rules for extraordinary valuations should be adjusted. Experts and some politicians have pointed out that people with low pensions will benefit less in the event of an extraordinary increase in pensions due to high inflation. They criticized the government for not changing the settings yet. They also mentioned a big impact on the budget. Last year's two extraordinary valorizations raised pension expenses by roughly 29 billion crowns. This sum then grows every year.
Pensions were last increased in January. A bonus of 500 crowns for a raised child was added to them. With education fees, the average amount in the first month of this year, according to the ministry, reached 19,438 crowns. Due to inflation, an extraordinary valuation is planned in June. “We will want to make adjustments in the area of valuations this year. We will clarify whether this will affect the valuation, which will now take place in June, in the coming days,” said the minister.
The pension consists of two parts. The solidary basic acreage is the same for everyone, and the merit percentage reflects the years worked, the amount of contributions from earnings and the number of raised children. In case of extraordinary valorization, only the merit portion is increased. With the regular addition in January, the pension is increased by the rise in prices and half of the growth in real wages. Jurečka had already said that the valorization could slow down from January. He mentioned that a third of real wage growth could be counted. According to CT, it could also increase by only two thirds of inflation.
Limiting the growth of higher pensions will weaken merit. The Constitutional Court criticized the weakening of merit in the past. A few years ago, the Organization for Economic Cooperation and Development (OECD) pointed out that there is a high degree of redistribution in the Czech pension system and that pensions are very levelized.
Jurečka wants to publish the pension system reform proposal in March
The Minister of Labor and Social Affairs Marian Jurečka (KDU-ČSL) wants to publish in March the draft parameters of the reform of the pension system so that the system is sustainable in the future. Before that, he will negotiate with the coalition and the opposition in February and March. The minister said this at a press conference in Nové Jičín today. According to him, the information about the increase in the retirement age that appeared in the media on Sunday is not objective and completely true. He emphasized that the parameters for granting old-age pension will not change for people who are of pre-retirement age today.
“On behalf of the Ministry of Internal Affairs and Communications, I clearly say that during February and March I will hold negotiations with coalition and opposition partners. I expect that then during March I will publish the entire issue of the pension system, including the proposal for the parameters of the pension system reform so that the pension system is sustainable in the future, so that ensured sufficiently decent pensions in the future,” said Jurečka.
According to the minister, the proposal will deal with adjustments to prevent the pension system from falling into a deep deficit. “We will solve it with several tools, far from one. We will work to really know how to distinguish people who work in physically demanding professions, so that these people can retire earlier and not have it reduced. This will be balanced by a higher contribution to social insurance by employers,” said the minister. He stated that as of January, paramedics and company firefighters can go into early retirement without reducing the amount.
“We will also work with the duration of the insurance there, in order to perceive people who, for example, started working at the age of 18 or 17. You cannot take the pension reform out of context and write about a single parameter,” said the minister. According to him, the news about raising the retirement age in the media was mainly based on the recommendations of economists. “Last week, the coalition five (note the chairmen of ODS, KDU-ČSL, TOP 09, Pirátů and STAN) did not discuss any material on the pension reform,” said Jurečka. For example, Deputy Prime Minister Ivan Bartoš (Pirates) told ČTK today that the Pirates have comments on the plan, according to which it is necessary to improve the financial sustainability of the system and minimize the negative effects on seniors and workers.
“We have repeatedly informed the public that we are preparing a pension reform. Of course, the pension reform must also include the parameters of the fact that we are considering an increase in the age at which people retire. I can repeat again that nothing will change in the way pensions are now have been set. Gradually, the age for those retiring in the near future will increase until 2030, when the limit of 65 years will be reached, and there will be no change in this, nor would I allow it,” said Prime Minister Petr Fiala (ODS).
However, according to the Prime Minister, there is a need to think about raising the retirement age for today's forty-somethings. “At the moment we do not have an agreement on anything. The opinions of experts, analyzes created at the Ministry of Internal Affairs and Communications are available, and now political agreements and political negotiations must follow, in which we will definitely involve not only the coalition, but also the opposition,” said Fiala. He now considers it preliminary to talk about the age limit for retirement. “If you ask me about the proposals that are circulating in the media, I can imagine raising the retirement limit for the younger generation, but only on the condition that we can establish a way to distinguish, for example, demanding professions,” he said.
According to Jurečka, the principle is to maintain the average period of payment of old-age pension in the future, which is 21.5 years today. According to him, there will be places in the parameters where it will be possible to revise and adjust things, for example based on the development of the demographic situation. According to him, it is now impossible to say clearly what the average life expectancy or healthy life expectancy will be in 2035 or 2045.
On Sunday, Czech Television, referring to the material of the Ministry of Labor agreed at the coalition council, stated that today's fifty-somethings should retire at 66. People in their 40s should be eligible for a pension at 67, and people aged 34 and under should retire at 68. According to government spokesman Václav Smolka, the coalition has not yet approved the change, it is only one of the economists' proposals.
According to Bartoš, there will still be a discussion about the reform, nothing is final
There will still be a detailed discussion about the pension reform, nothing is final, Deputy Prime Minister Ivan Bartoš (Pirates) told ČTK today regarding the proposal published by Czech Television (ČT) on Sunday. The pirates have comments on the plan, which will still be discussed, added Bartoš. According to his side, it is necessary to improve the financial sustainability of the system and minimize the negative effects on seniors and workers.
ČT, referring to the material of the Ministry of Labor agreed at the coalition council, stated that today's fifty-somethings should retire at 66. People in their 40s should be eligible for a pension at 67, and people aged 34 and under should retire at 68. According to government spokesman Václav Smolka, the coalition has not yet approved the change, it is only one of the economists' proposals. He said on Twitter that the information published by CT is incorrectly presented. Now the retirement age for men and childless women is 64.
Bartoš wrote to ČTK today that there will be a detailed discussion about the reform. “Nothing is final. We have comments on the current proposal of Minister (Labor) Marian Jurečka (KDU-ČSL), which we will discuss. On behalf of the Pirates, we are mainly trying to improve the financial sustainability of the entire system and minimize the negative effects on seniors and workers, including their descendants.” stated.
