In a significant step toward pension reform, the Czech center-right government secured approval from the lower house on Friday to gradually increase the retirement age to 67 over the coming decades. Currently capped at 65, the retirement age will rise by one month each year, reaching 67 by 2056 for those born in 1989, according to the Czech Labour Ministry.
The reforms aim to encourage continued employment past retirement age, offering reduced social insurance payments for working pensioners and increased pensions for women who took time off work to raise children. Additionally, the new plan enables individuals in physically demanding jobs to retire up to 30 months earlier than the statutory age.
These changes address mounting budget pressures as pension costs currently make up about a third of state spending and are expected to increase as the Czech population continues to age. Similar reforms have been pursued across Europe, including in Germany, which plans to increase its retirement age to 67 by 2031 and recently passed measures to incentivize older workers to stay in the workforce.
With aging trends, the Labour Ministry projects that by 2050, there will be only two working individuals per pensioner, a decline from 3.5 in 2020. Opposition parties, led by Andrej Babis' ANO group, which currently leads in polls, have vowed to reverse the changes if they win in the upcoming elections. The proposed reforms now await consideration in the upper house, the Senate.
