PRAGUE, April 30, 2024 (BSS/AFP) - The Czech government on Tuesday approved a
pension reform allowing the retirement age to rise above 65 to respond to the
needs of an ageing society, Prime Minister Petr Fiala said.

The reform, expected to take effect in 2025, will be submitted to parliament
where the government has a majority.

"The reform will ensure dignified pensions to people who are in their
thirties and forties today," Fiala told reporters.

"Had we not approved it, the system would not be sustainable and it would
collapse sooner or later," he added.

The retirement age has been growing steadily and is currently capped at 65
years for people born after 1971.

Following the reform, the retirement age will rise with life expectancy and
will be set every year for people who have just turned 50.

The reform reckons that an average Czech will spend 21.5 years in retirement.

The government expects its pensions account to run a deficit representing one
percent of gross domestic product (GDP) in 2050 following the reform, against
five percent without the reform.

"We had one pensioner per five people in 2000. In 2050, it will be one per
two people, and it's clear that we must do something," Fiala added.

The minimum pension will grow to 20 percent of the average wage.

The reform also allows people doing risk jobs to retire up to five years
earlier.

The Czech Republic is an EU member of 10.9 million people with an economy
heavily dependent on car production and exports to the eurozone.