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Czech government approves retirement age rise

The Czech cabinet today unanimously approved the pension reform bill that will gradually increase the retirement age to 65 years and extend the obligatory social insurance from 25 to 35 years, the Government Office’s press section told ČTK.

The government expects the Chamber of Deputies to start debating the first stage of the pension reform in March. The retirement age in the Czech Republic has been gradually raised since the mid-1990s and it is to stop at 63 years. At present men retire at the age of about 61, childless women at the age of 60 and mothers earlier, according to the number of children. The bill reckons with the retirement age rising at the same pace, that is annually by two months for men and by four months for women. Mothers of two and more children will still have a chance to retire earlier. Under the bill, the obligatory insurance period would be extended by 10 years, while the years of studies would not be included, except for those who would complete their studies by 2010.

Labor and Social Minister Petr Necas (senior ruling Civic Democrats, ODS) says people work for 40 years on average in the Czech Republic at present. The bill would also change the disability pension into a three-stage system, according to the disability level, and improve conditions for working pensioners. The center-right government of the ODS, the Christian Democrats (KDU-CSL) and the Greens has divided the pension reform into three stages that should be completed by the 2010 general election. The first stage is based on the bill that the cabinet approved today. The third phase would introduce the possibility of saving in funds, on the basis of individual pension accounts. The government coalition and opposition were to reach agreement on the pension reforms by last Christmas, but the negotiations practically collapsed.

The government parties still plan to negotiate the reform with the opposition Social Democrats (CSSD) even after the pension bill is submitted to deputies. The Social Democrats say they want to debate the whole reform and not only its first stage and they oppose the idea of sending a part of insurance to funds. The leadership of the CMKOS trade union umbrella organization has criticized the rise in retirement age as well as other planned stages of the pension reform. CMKOS chairman Milan Stech recently said the unions would strive for return to the original pension system if the government succeeded in pushing through the changes. (ceskenoviny)