The Czech Republic is preparing a large-scale pension reform that will affect everyone – from local residents to Ukrainian refugees working and paying taxes. Many changes are on the horizon: starting from October 2024 and continuing until 2035, the system will be gradually restructured to address the increasing number of retirees and the pension fund deficit.

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Currently, the Czech Republic operates on a solidarity system where the working population supports current retirees. However, the number of elderly individuals is growing while funds are dwindling, reports Radio Prague International.

In 2023, the fund deficit reached a record 73 billion crowns (approximately 1% of GDP). If no changes are made, by 2050 the figures could turn significantly negative.

Many factors influence the situation:

  • aging population – the number of people of retirement age is increasing,
  • slow economic growth,
  • high inflation,
  • deficit in the Pension Fund.

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What will change in the system?

  • Service period for early retirement: starting October 2024, a minimum of 40 years of work will be required for early retirement instead of the current 35. Notably, education will only count for 80%.
  • Pension increases: starting in 2026, payments will rise more slowly – over 10 years, the growth will decrease by 8%.
  • Minimum pension: with the minimum service period, it will amount to 20% of the average salary.
  • Tax benefits: the conditions for pension savings have been revised – now they require higher minimum contributions and a longer accumulation period.

Пенсионеры, фото из открытых источников

What does this mean for Ukrainians?

Ukrainians who work legally and pay taxes in the Czech Republic will be eligible for pensions under the same conditions as Czechs. The key is to meet two requirements: accumulate the necessary service period and reach retirement age (65 years).

If it is not possible to accumulate the full service period (35 years), it is still possible to receive payments, but proportionate to the contributions made. In such cases, Czech authorities will contact the Ukrainian Pension Fund to verify the service period obtained in the homeland.

Pensions from Ukraine and the Czech Republic are paid separately. The Ukrainian portion can be received in a Ukrainian bank account.

Advice for Ukrainians in the Czech Republic:

  • Regularly pay social insurance contributions.
  • Keep all documents related to your employment.
  • Stay informed about changes to avoid missing anything.