Czech banknotes, crowns, bank safe – illustrative photo.
Prague – Last year, the state paid out 7.6 billion crowns in contributions to supplementary pension insurance and supplementary pension savings. The average monthly state allowance increased by three crowns to CZK 149 at the end of 2021. The volume of contributions of participants in supplementary pension insurance and supplementary pension savings in this period amounted to CZK 41.5 billion. The number of people saving for a pension with a state contribution in the so-called third pillar of the pension system decreased last year. This follows from the statistics of the Ministry of Finance (MF), which is available to ČTK.
The average monthly state contribution paid for supplementary pension insurance was 141 crowns last year, one crown more year-on-year. On average, the monthly state contribution to supplementary pension savings, which has replaced supplementary pension insurance since 2013, has increased by the same crown to 162 crowns.
At the end of last year, 4,397 people saved for their pension with the state contribution in the so-called third pillar of the pension system million people, 44,000 less than at the end of 2021. At the end of the year, there were 2.775 million people in transformed funds, which people can no longer enter. This was 214,000 less than at the end of 2021. Supplementary pension savings have 1,622,583 million people, 170,000 more than in December 2021.
The average monthly contribution of a participant in supplementary pension insurance and supplementary pension savings increased by CZK 20 to CZK 816 by the end of 2021. The average monthly contribution of a participant in supplementary pension insurance increased by CZK 14 to CZK 795, and a participant in supplementary pension savings by CZK 24 to CZK 853.
New contracts on supplementary pension insurance could be concluded until November 30, 2012. From January 2013, only contracts on supplementary pension savings can be concluded. This is different mainly in the necessity of choosing an investment strategy. The new funds no longer guarantee that any loss will not reduce the client's savings, and they will not even pay out half of the saved money after 15 years. On the contrary, it offers a possible higher valuation. People have been able to take out additional insurance through pension funds with a financial contribution from the state since 1994. Nine of the original 44 funds remain.
Since more and more people in the Czech Republic are withdrawing their savings from the third pillar of supplementary pension insurance, the Ministry of Finance plans to tighten the conditions for withdrawals. And to get state support, it should be necessary to save more money. “We are thinking about tools to motivate the younger generation to save for the long term, to eventually use the saved money on a monthly basis as an annuity,” Finance Minister Zbyněk Stanjura (ODS) told TN.cz. The Ministry of Finance proposes that those who want to withdraw the saved money at once must return a part of the state contribution, namely a quarter to a half of it.
Number of pension insurance participants in the third pillar funds:
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Source: Ministry of Finance