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."
The PPI has unveiled a policy paper outlining current considerations and policy debates relevant to DC scheme default strategies. Kim Kaveh explores some of its views.
The £30bn local government pension pool has appointed Quoniam and Robeco to manage an active equity portfolio worth around £400m.
The volume of insured buyouts from FTSE 100 defined benefit (DB) schemes could increase from £5bn to £300bn by 2029, according to Lane Clark & Peacock (LCP).