Czech Pension Funds Overcome Inflation in a Significant Turnaround

Last year, Czech pension funds flourished, primarily due to rising stocks. Dynamic supplementary pension savings funds delivered an average appreciation of 20.6 percent, balanced funds 14.8 percent, and conservative funds, mainly consisting of bonds in their portfolios, were nine percent. The Association of Pension Companies provided this information.

Most of these funds overcame inflation, which reached 10.7 percent last year. This marked a significant turnaround from the unsuccessful year of 2022, when dynamic pension funds wrote off an average of more than ten percent, especially with inflation at 15.1 percent.

“We believe that not only last year’s excellent results but also the long-term quality performance of mainly dynamic and balanced funds will be an incentive for participants in the old pension insurance to transition to new funds,” declared Aleš Poklop, president of the association.

Those hesitant to transition all their hitherto saved money can now ‘freeze’ it on the old contract and establish a second contract already in the new funds.

In the past five years, dynamic participant funds have achieved an average annual appreciation of 9.05 percent, balanced 5.4 percent, and conservative funds only 1.7 percent. As Poklop suggested, a weaker annual result is traditionally expected from pension transformation funds, i.e., former pension insurance. The data will be known only in the spring, but the year before last, their revenues usually ranged from one to two percent.