Members of the opposition ANO party in the Czech Republic have announced their intent to challenge the government’s recently enacted amendment to pension laws in the Constitutional Court. The amendment, which tightens conditions for early retirement and alters the regular indexation of pensions, has prompted ANO to take legal action. This decision was announced by ANO chairwoman Alena Schillerova after a parliamentary group meeting.

Schillerova cited two primary reasons for the legal challenge. First, ANO alleges that the government violated the Chamber of Deputies’ rules of procedure by setting a fixed time for the final vote on the amendment, despite some 30 MPs still being registered to participate in the debate. Second, ANO claims that the amendment violates the principle of expectation concerning early retirement rules, asserting that changing such rules without adequate notice or consultation is unjust.

In response to ANO’s decision, Labour and Social Affairs Minister Marian Jurecka expressed disagreement with ANO’s arguments against the pension amendment. He called for constructive proposals from the opposition to strengthen the sustainability of the pension system in the future, emphasizing that the government had transparently presented the changes since April.

The pension amendment, which takes effect next month, reduces the possibility of early retirement from five to three years before the regular retirement age and reduces the sum received. The merit part of the pension will not be indexed until the regular retirement age. Additionally, the minimum period of social insurance payments will be extended by five years to 40 years.

Under the current pension indexation system, pensions increase by inflation and half the rise in real wages. The amendment changes this to account only for the price rise for pensioner households and one-third of real wage growth, as was the case before 2018. Extraordinary indexation of pensions in case of higher price rises will be replaced by a temporary pension bonus.

The government originally planned for these changes to take effect in September. However, President Petr Pavel signed the amendment on September 1, leading to a one-month delay in implementation. This delay is expected to result in up to 10,000 more people retiring earlier than planned, at an estimated cost of up to CZK 4 billion in the next year alone.

In addition to their challenge to the pension amendment, ANO deputies plan to submit approximately 35 proposed changes to the government’s consolidation package, including tax adjustments, aimed at improving the state budget. The package is set to undergo a second reading in the Chamber of Deputies at the beginning of its September session. Schillerova reiterated ANO’s opposition to the tax package in principle, emphasizing their preference for more effective tax collection and a reduction in the grey economy.

Article by Prague Forum