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The Czech government on Tuesday approved a pension reform that allows the retirement age to be extended beyond 65 to take into account the needs of an aging population, Prime Minister Petr Fiala said.
The Czech government on Tuesday approved a pension reform that allows the retirement age to be extended beyond 65 to take into account the needs of an aging population, Prime Minister Petr Fiala said.
The reform, due to take effect in 2025, will be submitted to parliament, where the government has a majority. “The reform will ensure dignified pensions for people who are over thirty and forty today,” P. Fiala told reporters.
“If we had not agreed to this, the system would not be sustainable and sooner or later it would fail,” he added.
The retirement age is constantly being increased, currently later than in 1971. people born retire at 65. The reform provides that the retirement age will increase with life expectancy and will be set annually for people who have reached the age of 50.
The reform also provides that the average Czech will spend 21.5 years in retirement.
According to the government’s calculation, in 2050 after the reform, its pension account deficit will amount to one percent of gross domestic product, compared to five percent without the reform.
“In 2000 there was one pensioner for five people. in 2050 two people will have one pensioner, so it is obvious that we have to do something”, P. Fiala added.
The minimum pension will increase to 20 percent. average salary. The reform also allows people in risky jobs to retire up to five years earlier.
10.9 million people live in the Czech Republic, a member of the European Union. people, the country’s economy is highly dependent on car production and exports to the Eurozone.
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