Since 2021, the Czech government has begun to implement pension reform. Instead of the old practice of calculating pensions, a scheme was introduced, tested by other EU countries. Thanks to innovations, the pension system of the Czech Republic has become one of the most stable and successful in the world, despite difficult demographic conditions. It is interesting to know what a pension in the Czech Republic is like and how changes in the Czech pension system have affected Russians living and working in the country.
Pension system of the Czech Republic: highlights
According to Czech law, the prerequisites for applying for a pension are:
- legal work in the Czech Republic;
- availability of the required work experience;
- reaching a certain age;
- tax deductions to the country's pension funds.
Pension issues are regulated by Czech pension legislation (Laws of the CR No. 155/1995 "On Pension Insurance", No. 117/1995 "On State Social Assistance", No. 426/2011 "On Pension Savings", etc.) and EU regulations. For citizens of the Russian Federation, there are bilateral agreements on social security between the Czech Republic and the Russian Federation.
Changes in the Czech pension system affected the practice of financing pensions, seniority, etc. Thus, the Czech Republic switched from continuous financing of pensions to funded, then to mixed financing. By means of payments to the able-bodied population, the state provided the current pensioners with the minimum part of the pension provision - důchodové pojištění, the rest consists of pension savings - důchodové spoření.
Since 2021, the Czech Republic has been actively implementing the procedure of voluntary additional pension savings of citizens (třetí pilíř), whose funds are saved in one of eight non-state funds. The state provides support to pensioners with subsidies (the amount depends on the personal contribution of the citizen), tax benefits for employers in the amount of pension contributions, etc.
Pension savings are not limited in size, and the pension fund can invest them in the Czech economy and provide a small income. After reaching retirement age, such a fund pays the entire accumulated amount in full or issues it monthly.
Agreements between the Russian Federation and the Czech Republic on social security
Positive for people who moved from Russia to the Czech Republic for permanent residence or returned to Russia from the Czech Republic is the fact that back in 2021, a bilateral Social Security Treaty was signed between the countries, which entered into force on 01.11. 2021 according to the additional agreement of 08.08. 2021 between the Ministry of Labor and Social Protection of the Russian Federation and the relevant ministry of the Czech Republic.
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The documents refer to insurance pensions (including disability pensions and loss of a breadwinner). Transfer of social pensions abroad is impossible - they are paid only where the citizen lives.
The pension agreement between Russia and the Czech Republic allows Russian retirees to convert seniority and pensions in the Czech Republic. According to the agreements, citizens of the Russian Federation who have legally worked in the Czech Republic for 15 years or more have the right to apply for a Czech pension. If there is not enough work experience in the Czech Republic, this deficit can be covered by Russian work experience.
Retirement age in the Czech Republic
For a long time, the retirement age in the Czech Republic was 57 for women and 60 for men. The question of the need to raise this qualification has caused numerous discussions in Czech society. Supporters of such a step argued the inevitability of such measures by the aging of the Czech nation, opponents argued their objections by the intensification of migration processes and the influx of young people into the country.
There were proposals to raise the old-age retirement age to 73 years, to link it with the year of birth, the number of children born, etc. As a result, they agreed on a compromise: from 2021 to establish a single retirement age for all those born later than 1971 in the Czech Republic - 65 years old, and revise it every five years, taking into account statistics on the demographic situation and life expectancy. The required work experience from 2021 is 35 years (for persons who reached retirement age in 2021 - 25 years).
Pension in the Czech Republic: what the numbers say
Czech pensioners are not among the wealthiest in Europe. The size of the Czech pension is inferior to pension payments in Germany, France, Italy, Norway, Luxembourg, Sweden, Finland, etc.
Interesting fact. In addition to the pension, Czech citizens can count on free medical insurance with payment for treatment and annual rest in a preventive sanatorium.
The amount of security depends on the number of years worked, the amount of salary, the availability of additional bonuses: for example, a scientific degree, state awards, etc. As of 2021, the average pension in the Czech Republic is 11807 CZK or 460 euros.
It should be borne in mind that there is a gender inequality with regard to old-age benefits in the Czech Republic: pensioners here receive on average 2300 kroons less.
At the same time, the Czech government pays much attention to improving the welfare of citizens of retirement age, periodically revises the amount of payments. So, according to the law approved in 2021, from 01.01. In 2021, the basic part of the pension will be 10% (instead of 9% at present) of the average salary. In this regard, the average pension in the Czech Republic in 2021 will be 13,200 kroons (510.48 euros). In addition, pensioners over 85 will receive an additional 1,000 kroons (38.67 euros).
You should also figure out what the minimum pension in the Czech Republic is. As such, there is no minimum level of payments for pensioners: if a person of retirement age has not completed the established length of service and has no means of subsistence or housing, he can only rely on assistance in dire need by submitting a request and fulfilling all the conditions of the state social service.
How is pension accrual in the Czech Republic
For residents of the Czech Republic, payments are calculated and accrued by the Ministry of Labor and Social Affairs. In this case, the following are calculated:
- base amount. From 01.01. 2021 its size will be 10% of the average salary of the insured person;
- percentage component - 1.5% (for entrepreneurs - 1.2%) of the gross annual salary (výpočtový základ).
For Russians who live in the republic and are entitled to a Russian pension, its accrual, according to the agreement between the Russian Federation and the Chechen Republic of 2021, occurs according to the proportional principle: the pension for the length of service acquired as of 12/31/2008 is calculated and paid by the country , in which the pensioner lived at that time. Since 2009, each party has calculated a pension based on the length of service acquired in its territory.
For example, a Russian who has worked in the Czech Republic for 20 years and in the Russian Federation for 10 years will receive:
- theoretical calculation of the amount of payments for 30 years in accordance with Czech law;
- calculation of the actual pension for 20 years - 2/3 of the theoretical amount. The rest will be paid by the Russian side.
In the absence of the necessary seniority for calculating the Russian pension, the earned pension experience in the Czech Republic can be added to the Russian one.
If all the conditions are met, a package of papers is prepared, which is submitted 4 months before the onset of retirement age to the regional social security departments of the Czech Republic (Okresní správa sociálního zabezpečení) at the place of residence. Such submission of an application is counted as a simultaneous appeal to the Pension Fund of the Russian Federation.When calculating a pension in the Russian Federation, it is transferred to Czech banks to pension accounts in euros or US dollars at the current exchange rate of the Central Bank of the Russian Federation.
Documents for registration
List of documents that should be submitted for registration of pension payments:
- application form;
- identity document (passport);
- birth certificate;
- educational documents;
- confirmation of insurance experience in the Czech Republic and the Russian Federation.
It is necessary to provide originals and notarized copies. Labor books, birth certificates and other documents must be accompanied by a translation. You may also need additional ones: for example, for disabled people - proof of disability, for men - a military ID, for businessmen - an extract from the register of entrepreneurs, if there are children - their birth certificates, etc.
Russian residents of the Chechen Republic should contact the consulate of the Russian Federation and order documents for the payment of a pension: an act of personal appearance, certificates of permanent residence outside the Russian Federation and other documents, having previously specified their list in the competent service. (Resolution of the Government of the Russian Federation No. 1386 of December 17, 2021)
The situation with pensions in Europe
Good pensions in European countries are received by those who have worked the required number of years and regularly paid all taxes. Due to the global aging of nations and the focus on a high level of state social protection for pensioners, the EU countries are forced to constantly balance their pension systems. General trends here: an increase in the age of retirement, active use of the accumulative principle of the formation of provision for old age.
Luxembourg, Norway, Denmark, Iceland, Switzerland are often among the leaders of the world ratings of the pension index. You can learn more about pension systems in the EU by reading the article "Pensions in Europe"
Let's summarize
The pension system in the Czech Republic is in the process of optimization and reform. Thanks to the existence of a bilateral agreement of 2021 between the Russian Federation and the Czech Republic on social security, Czech and Russian citizens with work experience in these countries have the opportunity to draw up both Czech and Russian pensions.
At the same time, citizens of both states enjoy certain benefits. So, the accrual of payments occurs on a proportional basis, when expenses are distributed between states depending on the length of service earned in each of them. The pension accrued by the Pension Fund of the Russian Federation in the Czech Republic for Russians goes to the personal bank accounts of pensioners in the Czech Republic and is paid in euros or US dollars.
