Jurečka presented Pavlo with arguments for a lower valuation of pensions

Jurečka presented Pavlo with arguments for a lower valuation of pensions

Jurečka presented Pavlo with arguments for a lower pension valuation

Illustrative photo – President-elect Petr Pavel's press conference to summarize the bilateral negotiations in Munich and the program for the following week. February 20, 2023, Prague.

Prague – President Petr Pavel heard all the arguments for reducing the valorization of pensions at a more than one-hour meeting with Minister of Labor and Social Affairs Marian Jurečka (KDU-ČSL). After the meeting with Pavel, Jurečka told journalists that the new president asked about all the pitfalls, including discussion of changes by the House in a state of legislative emergency, and he is very familiar with the subject of pensions. Jureček did not want to comment on Pavlo's positions. Jureček defends the discussion of questionable valorization in the state of emergency by saying that the opposition representatives notified him to veto the discussion of the amendment in shortened terms.

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Jurečka described to Pavlo all the reasons that led the government to the proposal, including the impact of the proposal on public finances. According to him, the President listened carefully to arguments, for example, that valorization would forever remain a permanent mandatory expenditure. Before him, Jurečka also mentioned the record increase in spending on pensions last year and the fact that pensions reached the highest ratio to average wages.

The minister outlined to President Pavlo why, in his opinion, it is necessary to carry out a comprehensive pension reform without delay. “I showed the effects that will come after 2030 (if the current state of pension payments continues), i.e. the huge claim of additional expenses from the state budget to supplement pensions would gradually increase to an amount greater than 300 billion crowns per year, it would exceed the threshold of five percent of GDP, which means that he would logically have to take this money somewhere else, save for example on the agenda of building transport infrastructure, the agenda of education or the agenda of other departments,” Jurečka told journalists.

According to the lawyers contacted by ČTK, from the point of view of the legal conditions, the discussion of the pension amendment in the House of Representatives in a state of legislative emergency is apparently borderline, but not completely out of the question. According to Marko Antoš, there is a risk that the amendment will come up against the Constitutional Court (ÚS) in such a case. If the law is adopted, the opposition legislators are talking about challenging it. The Cabinet justified the request to declare a state of legislative emergency by the threat of significant economic damage. Jurečka believes that the cabinet's attempt to discuss the proposal with shortened deadlines would be a serious argument in the event of a dispute before the Constitutional Court. “There was clearly an effort to discuss it in a standard way with shortened deadlines,” he stated.

According to the draft law, the average old-age pension should increase from June due to inflation by 760 crowns instead of 1,770 crowns, which would have increased according to current rules. According to the cabinet, the reduction is necessary to maintain the pension system, otherwise its deficit this year would reach 90 billion crowns. The opposition refuses to support the change, threatening complaints to the Constitutional Court and obstructions in the House of Representatives.

According to the law, pensions are increased exceptionally due to inflation if the increase in the consumer price index exceeds five percent during the monitored period. The merit percentage part of the pension is raised. It grows by as many percentages as the price increase has reached. However, according to the amendment, the percentage of the pension should increase less in June, namely by 2.3 percent and, on top of all that, by 400 crowns. An additional 15 billion crowns is needed for this this year. The government argues the dynamic growth of pensions last year and the fact that it must also have something to help other groups of residents affected by high inflation.