Czech government raises retirement age

(Patria) - The Czech government has approved changes to the country's pension system - raising the retirement age and lowering pensions for future retirees to save billions of dollars annually.

The reform introduces gradual increases in the retirement age, which is currently 65, so that for people who are now 52, retirement will be postponed by seven months.

It also reduces pensions for future retirees by about eight percent compared to the current formula.

Czech pensions, financed by current contributions from workers and entrepreneurs, automatically increased in relation to the average salary thanks to double-digit inflation in 2022 and 2023.

The Central European country, like many others in the developed world, faces fiscal pressure from an aging population due to longer life expectancy and low birth rates.

- (The changes) will prevent the collapse of the pension system and ensure dignified pensions for today's young generation as well - assures Czech Prime Minister Petr Fiala.

The reform proposed by the center-right government aims to maintain the average expected retirement period at around 21 years. This means that when life expectancy changes, the retirement age will also change.

The specific age will be determined when the people concerned are 50 years old.

According to data from the statistical office for 2022, the average life expectancy for people born in the Czech Republic is 76 years for men and 82 for women.

The reform also allows for earlier retirement for people working in physically demanding or risky professions, such as forest workers, firefighters, miners, welders, and specialized nurses.