CZECH REPUBLIC – Very few Czechs will opt for the new second-pillar pension system due to a lack of information and growing uncertainty over future developments, according to Tomas Matejovsky, partner in commercial, regulatory and disputes at CMS Cameron McKenna.
Since the start of the New Year, Czechs have been able to opt into the newly created second pillar by transferring some of their first-pillar pension contributions.
But the overall feeling about the reform "has so far been rather negative", Matejovsky told IPE.
He put the lukewarm reception down to an overall lack of information and the fact the reform was "very ineffective", as it lacked any kind of compulsory element – for young people, for example.
He also pointed out that opposition politicians and industry figures had launched "constant attacks" on the reform.
Meanwhile, local news daily The Prague Monitor quoted the labour minister Tomas Machanec as saying that Czechs saving into the second pillar would receive 10% less of a state pension than those who remained solely within the first pillar.
The ministry said these people would be "compensated" by saving in pension funds.
"The statement is more or less true," Matejovsky told IPE. "However, people opting for the second pillar should get a higher overall pension thanks to them 'investing' in the second pillar."
He added many people "feared" that the opposition – comprising the Social Democrats and the Communist Party – would abolish or "drastically change" the system should they win the next elections, scheduled for 2014.
"Therefore, rather few people are opting for the second pillar now," Matejovsky said.
According to an official statement quoted by Czech media, "hundreds of people" joined the second pillar within the first week of 2013.