The Czech government is preparing to implement changes in the calculation method used to determine the retirement age, resulting in later retirement for individuals born after 1965. Under the new system, people will be expected to spend an average of 21.5 years in retirement. While the change is set to take effect in two years, its impact will be observed in 2031, specifically affecting those born after 1965, including individuals in their fifties.

According to Eva Davidová, spokesperson for the Ministry of Labor and Social Affairs, the retirement age will be determined annually based on data from the Czech Statistical Office regarding the average life expectancy for men and women at the age of fifty. Current individuals in their fifties will not be significantly affected, as the retirement age limit will be extended by a maximum of six months.

In the coming years, it is expected that the retirement age limit will be further increased, indicating that younger generations may commence retirement at or after the age of 66. However, the ministry does not anticipate individuals in their forties to retire at the age of 67.

The government justifies these changes as necessary to address the pension system deficit. Without adjustments, pension-related expenses would reach five percent of the gross domestic product by 2050, amounting to an additional 350 billion CZK in today’s money.

Critics, including the opposition and some experts, view the plan as poorly conceived. Aleš Juchelka, the shadow Minister of Labor from the ANO movement, argues that adjusting the retirement age based on increasing life expectancy is flawed, emphasizing that individual life expectancies and healthy life expectancies should also be considered. Juchelka suggests that retirement should not occur later than age 65.

Labor unions are also skeptical of the proposal. Vít Samek, Vice Chairman of the Czech-Moravian Confederation of Trade Unions, criticizes the plan, stating that if the promised 21.5 years of retirement are added to the current retirement age of 64 for men, the result is an age of 85. However, the average life expectancy for men is significantly lower.

The average life expectancy for seniors, according to the latest annual pension report from 2021, is approximately 81.86 years, with nearly 24 years spent in retirement. Statisticians estimated that the average life expectancy for men who turned fifty in 2019 was around 76 years, while for women, it was nearly 82 years.

It is worth noting that the average time spent in retirement is influenced by individuals who retire earlier, such as those who opt for early retirement or professionals in specific fields like mining and emergency services. These individuals may be eligible for retirement at an earlier age.

Article by Prague Forum