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Czechs to set up multi-party reform commission

CZECH REPUBLIC - Czech Labour and Social Affairs Minister Petr Necas has announced the creation of a multi-party commission by June, in an attempt to negotiate sustainable pension reforms.

The panel will discuss a pension reform paper which is expected to be drafted over the coming weeks by the government coalition of Civic Democrats (ODS), Christian-Democrats (KDU-CSL) and the Greens.

Necas stressed any pension reform needs to be agreed to by the opposition Social Democrats and as well as other parties if it is to survive any future changes in government.

The coalition will then present its pension reform bill to trade unions, some institutions and employers for further comments.

Major points on the reform agenda will be to increase the statutory retirement age to 65 along with a gradual increase in the required years of pension insurance payments to be eligible for a state pension, from 25 to 35 years.

A discussion of the pension reform was among the top priorities after the elections last summer. However, other issues such as public finance reform have occupied politicians until now.

Meanwhile, the largest Czech pension fund PFCP ,with assets in excess of €1bn and about one million members, has posted returns of 3.3% for 2006.

This return is 0.5 percentage points lower than 2005 because of lower equity performance. However, the fund still managed to beat the 2.5% inflation rate in 2006.

The Czech fund, which is exclusively a third-pillar supplementary pension scheme, reported profits of CZK1.03bn (€37.5m), a year-on-year growth of CZK69m.

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