Czech lower house backs gradual rise in retirement age

The Czech centre-right government won lower house backing on Friday for pension reforms that will gradually raise the retirement age to 67 in the coming decades.

Under plans, the retirement age, currently capped at 65 for younger generations, will rise by one month a year, reaching the cap of 67 by 2056 for people born in 1989, the Labour Ministry said.

The plan also promotes working after retirement age by cutting social insurance payments paid by working pensioners, and raises pensions for women who had been out of the workforce while raising children.

The reforms, which now head to the upper house or Senate, also allow people in the most physically demanding professions to retire up to 30 months earlier.

Pensions account for around a third of state budget spending and are putting an increasing strain on public finances as the Czech population ages like elsewhere in Europe.

Other European countries have also taken steps to alleviate pressure on pension systems, including raising the retirement age.

In Germany, where the statutory retirement age is scheduled to rise to 67 in 2031, the government approved in September pension reforms that included incentives to keep workers in the labour market for longer.

The Czech ministry said with ageing trends there will be two working people per pensioner by 2050, down from 3.5 in 2020.

Opposition parties, led by former prime minister Andrej Babis' ANO group which leads polls a year ahead of elections, have pledged to undo the changes if they take power.