Czechs given open pensions choice
CZECH REPUBLIC - Employees in the Czech Republic are being given more free choice over their pension provider in the latest reforms, but switching pension funds will be no longer free for all.
An amendment to the existing law on third pillar pensions - the only supplementary pension pillar in place in the Czech Republic at the moment - has been in place since last weekend which now prevents employers from influencing their employees' selections towards a particular pension provider.
"It is also now forbidden for employers to receive any kind of benefits in connection with pension fund membership of their employers," explained Jiri Rusnok, pensions director at ING and head of the Czech pension fund association APF CR.
Similarly, intermediaries selling pension fund contracts now have to disclose the commissions they receive for each contract.
On the other hand, the 10 pension fund providers have been granted the option of introducing fees for people switching funds or leaving the system before a minimum period of five years.
Switches remain free after that period but early changes could cost up to CZK800 (€31) - according to Rusnok, as this is the maximum fee introduced by most providers.
The legal changes come just weeks before general elections are to be held in October.
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