Minister of Labor and Social Affairs Marian Jurečka presented the basic parameters and outlines of proposed pension reform to President Petr Pavel on Tuesday. The two discussed various issues related to pensions, including the retirement age. Jurečka does not want to increase the retirement age, but he admitted that the limit might change depending on life expectancy. He stated that the average length of time people receive pensions is currently 21.5 years, which is likely to remain unchanged.
Jurečka said that they went through all the proposed measures during the meeting and that the key things in the reform were intended to ensure that today’s forty-year-olds and younger generations have a sustainable pension system in the future. President Pavel listened to everything and participated in a discussion about the retirement age.
Jurečka emphasized that the retirement age limit will be linked to how life expectancy develops in the future. It is essential to anchor the principle that the average duration of pension payments is currently 21.5 years and to ensure that it is achievable in the future. At the same time, it should be linked to the person’s entry into the labor market, their insurance period, and their profession.
Jurečka repeated that he does not plan to raise the retirement age. However, the limit might change depending on life expectancy. He added that there is no certainty that life expectancy will increase, so that the limit could decrease.
Jurečka was not too specific, as he will present the final version of the reform in mid-May. For example, he will provide details about the proposal that pensions could be calculated from the joint income of married couples. Jurečka stated that if nothing is done, the pension account could run into a deficit of more than 5% of GDP by around 2050. This represents a shortfall of CZK 300 to 370 billion in today’s prices, which would have to be covered by other parts of the budget.
The need for pension reform has been repeatedly emphasized due to demographic changes, as the population is aging and birth rates are declining. The reforms aim to ensure that the pension system remains sustainable in the future.