CZECH REPUBLIC - The Czech government has provisionally approved sweeping changes to the country's pension system, designed to curb massive potential future deficits and reform the economy.
Judit Kovács, consultant at Watson Wyatt in Hungary, said it was too early to assess the likely impact of the moves, and more time and research would be needed to fully take into account the effects of these reforms.
However, political opponents of the reforms - notably the country's left-wing Social Democrat and Communist parties - have promised to fight the proposals in parliament, despite the fact social expenditure in the Czech Republic has risen by 70% since 1999 and is up US$4bn on 2006 levels.
Last month, prime minister Mirek Topolánek laid out the government's agenda for pension reform, in which he committed the country to "safeguarding the long term financial stability" of the pension system. Alongside the rises in retirement age and social security contributions, the proposals include introducing a flexible age band for retirement and the creation of a reserve pension fund.
Topolánek also mooted the possible creation of a voluntary savings pillar based on an opt-out principle.
The European Commission this week criticised the Czech Republic in a report on economic convergence, which said current government gross debt levels - around 30% of GDP - caused largely by healthcare and pension costs, were unsustainable.
It said it put the country at high risk, unless it adhered to strict public expenditure rules and specifically referenced "necessary pension and healthcare reforms" as a roadblock to progress.
In a statement, Joaquín Almunia, economic and monetary affairs commissioner, said: "In view of the projected increase in age-related expenditure, the long term sustainability of public finances needs to be improved through the necessary pension and health care reforms."
Life expectancy in the UK saw no improvement between 2015 and 2017 as the number of people aged over 90 hit a record high, latest Office for National Statistics (ONS) data reveals.
Self-administered pension funds spent £14bn on payments to pensioners in Q2 2018, but only received £11.4bn of contributions (net of refunds), latest Office for National Statistics (ONS) data reveals.
The Pensions and Lifetime Savings Association (PLSA) has named the 17 members of its inaugural policy board after a competitive application process with 60 candidates.