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CZECH REPUBLIC/ECON - Czech Senate against retirement age rise, lower house to decide

Released on 2012-10-17 17:00 GMT

Email-ID 3855180
Date 2011-06-09 18:19:30
Europe seems to have a problem with this
Senate against retirement age rise, lower house to decide
9 June 2011

Prague, June 8 (CTK) - The Czech Senate, dominated by the leftist
opposition Wednesday modified the government's bill known as "the small
pension reform" by deleting from it an automatic gradual increase in
retirement age and changing the pension calculation method in favour of
medium-income groups.

The final decision on the changes the Senate made to the bill is up to the
Chamber of Deputies where the centre-right government has a majority of

During the four-hour Senate deabte Wednesday, the senior opposition Social
Democrats (CSSD) criticised the government for not having debated the
planned raising of retirement age with them and for setting no limit for
the increase.

For economic reasons and in view of rising life expectancy, the government
bill reckons with a gradual increase in retirement age for women born
after 1955 and men born after 1965. The retirement age for both women and
men is to get unified in 2041.

Under the bill, those who are forty years old now would retire at the age
of 66, and those born in 1977 at the age of 67, which is the present valid

The bill, however, reckons with younger people retiring at an even higher
age. Wednesday's ten-year-old people would retire at 71, the children to
be born in 2012 would retire at the age of 73, i.e. in 2085.

The CSSD blocked the retirement age increase one day after the EC
recommended that the Czech Republic raise the retirement age even quicker
than planned by the government.

As far as the change in the system of pension calculation is concerned, it
is a reaction to the Constitutional Court verdict saying that the present
system does not sufficiently reflect how much people contributed to the
state pension system while working.

The new calculation method is to reflect the principle of merit at the
cost of solidarity, to the benefit of people with high incomes.

Pensions are to newly derive from the average wage. The government
increased the basic sum from which pensions are calculated to nine percent
of the average pay. CSSD senators pushed through its increase to 10
percent, which, senator Zdenek Skromach said, would cost the state three
to five billion crowns.

Skromach, the CSSD's shadow labour and social affairs minister, wants to
gain the sum by raising social insurance caps.