A new Flash Report prepared by the European Social policy Network (ESPN) is now available and provides information on proposals of the Czech Expert Committee on pension reform.

The Czech Expert Committee on Pension Reform was established in June 2014 and is composed of politicians, independent experts and other stakeholders (labour unions, various pension and insurance associations).

In 2015, the Committee submitted several proposals to

• enhance the fairness of the calculation of pension benefits,
• improve the attractiveness of the supplementary pension savings scheme (Pension Pillar III) and
• to phase out Pension Pillar II, a voluntary, fully-funded pension savings scheme that is based on defined-contributions.

In particular, the Committee has proposed:

• a method to phase out Pension Pillar II which led to a proposal for a new bill discontinuing payments to Pension Pillar II from the beginning of 2016 onwards;
• suggestions to improve the attractiveness of Pension Pillar III by exempting these pensions from income tax if they are paid out gradually over at least ten years, by opening up Pillar III to all ages and by adjusting the investment and supervision rules governing the pension funds;
• reforms to Pension Pillar I (PAYG pension scheme based on defined benefits) through a new mechanism for recalculating the legal retirement age every 5 years, a shared assessment basis for married couples to address the gender pension gap and a differentiated pension insurance rate for economically active parents according to the number of dependent children in the household (for students up to 26 years of age).