CZECH REPUBLIC - The Czech senate has approved legislation that will raise retirement and implement tougher requirement for early retirement.

The senate, which is controlled by the ruling Civic Democrats, voted 43 to 10 to pass the pension bill, which now only awaits the president's signature to become law.

The bill will raise the retirement age to 65 for both men and women by 2030, replacing an earlier agreement which would have seen men retire at 63 from 2013 and women retire between the ages of 59 and 63, depending on the number of children they had raised, by 2013.

Additionally, the bill will extend the minimum working period required to be able to draw a pension to 35 years from 25, while introducing tougher conditions for early retirement.

Jiri Rusnok, pensions director at ING and head of Czech pension fund association and a former Czech finance minister, told IPE that the senate's approval was a significant change.

But he added that a lack of political will raised doubts about the practicality of further planned changes to the system.

Among plans announced by the government was the launch of a reserve fund to finance the conversion to a fund-based pension system.  The fund would be financed through the privatisation of state assets or dividends from shareholdings.

Rusnok commented that the fund would most likely be set up in the near future, though its funding plans were wishful thinking since only few state-owned enterprises were left to be privatised.

If you have any comments you would like to add to this or any other story, contact Carolyn Bandel on +44 (0)20 7261 4622 or email carolyn.bandel@ipe.com

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