Czech pension policy

The transformation of the Czechoslovak predominantly Bismarckian pension system into the Czech predominantly Beveridgean system was influenced by the liberal policy of Klaus’ government and by the creation of a complicated and poorly understandable calculation of both newly granted old-age pensions and indexation (valorization) of pensions. Recently, the marketing approach of politicians on these issues has also contributed to strengthening the levelling of pensions. More than half of Czechs nevertheless prefer ‘Bismarck’ to ‘Beveridge’ [...]

Extending pension coverage: Tax versus non-tax incentives

This paper compares the design, cost and e?ectiveness of three voluntary approaches for increasing pension coverage. The frst facilitates plan features designed to attract workers. The second provides tax and other fnancial incentives. The third mandates autoenrollment of workers with opt out. The non-tax incentives of plan features in the United States have had little e?ect on increasing coverage. Generous tax incentives in Germany and Czechia have raised coverage but are costly. Mandatory autoenrollment with opt out in the United Kingdom has achieved the highest coverage rate of the three approaches

Social and Provision Models of Pension Insurance and Savings

The social models (welfare regimes) typology makes it possible to understand the basic pension scheme concepts, key role of social policy in this regard, determined on the basis of public choice. However, pension provision systems also play a significant role in practice; provision model of a pension pillar or tier may considerably affect the results of application of the relevant social model. Analyses confirm the failure of annuity markets – not even government regulation could successfully reduce annuity costs to a sustainable level in any country, comparable to the provision of public pensions. Therefore, the private sector can only offer pensions savings, moreover with crucial government regulation. Occupational schemes converge to either mandatory or quasi-mandatory schemes throughout the world, or transform to workplace pensions as a new provision model that represents a soft compulsion neoliberal system in combination with auto-enrolment. In addition to analyzing social and provision models from the general perspective, with key emphasis on representative countries’ experience, the paper concentrates on individual pillars of the Czech pension system that have recently undergone a number of reforms, usually resulting in no improvement in their efficiency. All pension pillars in the Czech Republic are thus in need of a major reform

Czech Public and Occupational Pension Schemes and Reforms

The Czechoslovak communist retirement protection scheme resembled the Bismarckian earnings-related pensions, with new benefits close to final salaries and with their insufficient indexation. The aim of this paper is to evaluate the reform processes in Czechia and the potential for a simple technical reform that would make the public retirement schemes understandable and efficient. In the process of the transition to capitalism under liberal Czech governments, the prevailing concept of the public retirement scheme changed to a Beveridge model of pensions not being related to previous wages. The insufficient valorisation of bend points was the main method of this transition. Modern international pension theory recommends the separation of a solidary pillar and an earnings-related pillar. After the Czech “small” pension reform, a basic technical reform may be simply realised, resulting in a higher flat-rate pension and an NDC pension insurance scheme, convenient to parties with programmes based on three basic welfare regimes. The introduction of occupational pension schemes is necessary to reflect the specifics of arduous occupations

Social workers' compensation models and the Czech statutory employer liability insurance

Czech workers' compensation is "exemplified" by the adoption of the Worker's Accident Insurance Act in 2006, four deferments of its effective date and then complete annulment of the Act. A temporary settlement aimed at resolving the incompatibility of the communist model of workers' compensation for work accidents and occupational illnesses with the transition to a market economy after 1989 involved the implementation of statutory employer liability insurance for work accidents and occupational illnesses, outsourced to two private insurance companies; the current Czech government does not seem to have a know how to deal with it. The objective of this paper is primarily to advise the government using primarily the formulation and comparison of four basic social workers' compensation models and furthermore considering the existing sickness, pension and health insurance systems. The choice of a social model is namely a matter of public choice, but intensive lobbying also constitutes part of these processes. The analyses result in a recommendation to "dissolve" the statutory employer liability insurance into a jointly collected social insurance contribution for sickness and pension insurance, and partly to transform the current accident benefits into increased sickness and pension benefit assessments and partly to cancel them