Retirees have improved by thousands of crowns over the past year. Last December, the average amount of the Czech pension was 15,400 kroner, then came the valuation of January at more than 800 kroner, and the month of June at more than a thousand kroner, and now extraordinary pensions increase by another 700 kroner. This brings the increase to approximately 2,500 kroner.




Prague

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“The average amount of the Czech pension is currently developing very dynamically. After the September assessment, we will reach more than 18 thousand kroner. The next January assessment will again be 860 kroner, as well as an increase in educational fees. We are facing enormous uncertainty. This year, inflation is high, food and energy are becoming more expensive, however, pension assessments react to this strongly,” says Tomasz Machanek, director of the Social Insurance Department at the Ministry of Labor and Social Affairs.

Interview about pensions with Tomáš Machancc of the Ministry of Labor and Social Affairs

But Czech society is getting older, pensioners are growing, and it will be very difficult to secure funding for pensions in the coming decades. Should we worry about what the future holds for our children? “The system of continuous collection of insurance premiums from employees and their payment to elderly retirees is resistant to crises and economic fluctuations. We will certainly have them here in twenty, thirty or fifty years,” Tomas Machanek answers.

On the other hand, I must agree that there will be more old people and pensioners, and that the ratio of workers to people receiving old-age pensions will change. An increase in old-age pension recipients and a decrease in payers can be expected.


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According to him, it is likely that everyone who retires after twenty years will receive a pension that is 10 percent lower than today.

“It wouldn’t be a significant reduction, I don’t think so, but a reduction can be expected. The retirement age is also likely to increase. So I would recommend thinking about some kind of supplement to the financial security of old age.”

From January 2023, retirees who have raised children will improve. The allowance is paid in the amount of 500 kronor per month for each child brought up.

The amount becomes a permanent part of the retirement pension and is paid with the pension every month. Permanent pension increase. The entire pension will be estimated, including this amount of educational fees, ”explains Tomasz Machanek.


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“The tuition fee is intended to compensate those who have helped our company by educating future insurance payers for pensions that we cannot do without,” he explains.

According to him, a person who remained at home with the child after his birth, usually the mother, could not work for remuneration. In addition, after returning to work, he was paid less than his peers who were not at home, which will also affect the amount of his pension.

The contribution is awarded to all those entitled to an old-age pension who were decisively involved in the upbringing of their child or a child entrusted with them. Interested parties can find all the information on the website of the Czech Social Security Administration.

Listen online to Tomáš Machansc’s full interview on old-age pensions and the Ministry of Labor and Social Affairs’ pension plans.

Hana Oberova

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