Czech pension funds experienced a robust performance last year, propelled primarily by the surge in stock markets. According to data provided by the Association of Pension Companies, dynamic supplementary pension savings funds led the way with an average appreciation of 20.6%, followed by balanced funds at 14.8%, and conservative funds, largely composed of bonds, with a commendable 9% appreciation.

These stellar returns proved to be resilient against the backdrop of inflation, which soared to 10.7% in the same period. This marked a significant turnaround from the challenges faced in 2022 when dynamic pension funds recorded an average write-off of over ten percent, particularly with inflation at 15.1%.

Ales Poklop, President of the Association of Pension Companies, expressed optimism regarding the exceptional results in 2023, citing them as not only a short-term success but also reflective of the long-term quality performance of dynamic and balanced funds. Poklop anticipates that these impressive outcomes will act as a catalyst for participants in old pension insurance to consider transitioning to new funds.

For those hesitant to fully transition their accumulated savings, a flexible option allows individuals to ‘freeze’ their funds under the old contract while simultaneously establishing a new contract within the new funds.

Over the past five years, dynamic participant funds have demonstrated an impressive average annual appreciation of 9.05%, while balanced funds achieved 5.4%, and conservative funds registered 1.7%. Poklop acknowledged that the traditionally weaker annual results from pension transformation funds, previously known as pension insurance, will be disclosed in the spring. However, the preceding year typically saw returns ranging from one to two percent for these funds, indicating a potential upward trajectory in their performance.