Welcome! Good afternoon, welcome to this international event. We are representatives of Business Academy in Ostrava – Mariánské Hory.

What do changes in the pension system all over the world have in common? Later retirement! The pension legislation has undergone great changes lately, not only in the Czech Republic, but also in other advanced countries. Although the states attitude towards the sphere of pension differs, they have one feature in common – the retirement age is rising. In future, people are going to retire later than these days. The pension legislation in the Czech Republic, as well as in other countries, reacts on the economic and demographic changes. Life expectancy for 65 years-old-citizens in the OECD countries increases, for that reason the pensioners at present draw their state pension longer than in the past. Therefore, one of the state measures adopted is the gradual increase in the age of retirement.

Gradual increase in the retirement age in the Czech Republic The retirement age in the Czech Republic is different for men and women according to their years of birth. In case of women it also depends on the number of children they raised. The retirement age for people who were born between 1936 and 1977 is quoted in the annexe of the Act on pension insurance. The retirement age extends gradually. In the following table you can see the retirement age for several years of birth.

9/17/14 Year of birth Men Women according to the number of children 0123 or 45 and more y+2m57y56y55y54y53y y+10m57y+8m56y+4m55y54y53y y+6m61y59y+8m58y+4m57y55y+8m y+2m 63y+8m62y+2m60y+8m59y+2m y+10m 65y+8m64y+2m y

Effective retirement age in the OECD countries For citizens born after 1977 the retirement age is determined by a rule that you have to add certain number of calendar months to the age of 67. The months correspond to the difference between the policyholder´s year of birth and the year 1977, but you have to double them. According to the present legislation children born in 2014 will retire when they are 73 years and 2 months old.

The age limit for the retirement is not defined. In the following table you can see the effective retirement age in the OECD countries. In some of them, as well as in the Czech Republic, the retirement age is rising. At present, the most common retirement age in the OECD countries is 65 years for both men and women. The highest retirement age is now in Iceland, Norway and Israel (67 years for men). Then the USA, Ireland and Italy follow (66 years for men). The lowest retirement age is in Turkey and Korea (60 years for men). (For the Czech Republic you can see figures for women born in 1950 without any children)

9/17/14 CountryRetirement age for menRetirement age for women Netherlands65 Denmark65 Spain65 Poland6560 Greece6564 Austria6560 Finland65 France65 Belgium65 Luxemburg Hungary Estonia6361 Slovenia 63 62,5 61 Czech Republic Slovakia6260 Korea60 58 Turkey60

Kinds of pensions From the pension system old-age pensions and disability pensions are provided, as well as survivor's pensions (orphan, widow and widower's pension)

Classification of pillars Nowadays we have three pillars of the pension system: 1st pillar state pension 2nd pillar pension from voluntary retirement savings in funds 3rd pillar people's own savings

Continuous pension system In the Czech Republic people of working age work and finance the retired people's pensions. The average age of our citizens makes a real problem, as the pension system fell in a forty billion deficit.

Orphan pension Orphan pension is granted to: - A dependent child if his/her parent dies. - You are not entitled to get the pension after the foster parent or his/her husband dies. - The amount of the basic assessment of the orphan pension increased to 2,340 crowns per month in It is possible to draw the orphan pension until the age of 26 at the most. - A child is also entitled to get the orphan pension if he/ she cannot prepare systematically for his/her future career or he/she is unable to carry out a permanent gainful activity due to an illness or injury.

Orphan pension In case both parents die, the dependent child is entitled to draw the orphan pension after both of them. If the child is adopted, his/her right to get the pension expires. However, there is one exception: If the child is entitled to get the orphan pension after both parents, but he/she is adopted by one person only, only one right to get the pension expires (the other one can be paid out) The pension is paid out in cash by the Czech post, or, if the receiver asks so, on account in his/her finance house.

Widow and widower's pension Temporary It is possible to draw this kind of pension (in the course of one year) if our husband/wife died in the time when he/she gained the old-age pension or disability pension, or he/she was entitled to get the old-age or disability pension, died of industrial accident, or was entitled to gain the early old-age pension.

Widow and widower's pension Permanent We are entitled to gain the permanent widow or widower's pension if we meet the requirements to the temporary pension and in the same time we take care of a dependent child or our parents live with us in one household; if we are fully disabled, or we are old enough to get the old-age pension, or fulfill the age for widow/widower's pension. The minimal age for the consent to widow or widower's pension is the age of 58. The basic assessment is 2,340 crowns per month in 2014.

Disability pension A policyholder is entitled to gain the disability pension if he/she has not reached the age of 65 and became: 1) disabled and gained the necessary period for insurance 2) disabled due to industrial accident Full and partial disability do not exist any more, they were replaced by one disability, divided to three stages according to the percentage degree of the decrease in work ability.

Three stages of disability pension A policyholder is disabled because of a long-term unfavourable state of health to the extent of at least 35%. If his/her work ability decreased: -by at least 35 %, but not more than 49 %, this is stage one disability, -by at least 50 %, but not more than 69 %, this is stage two disability, -by at least 70 %, this is stage three disability.

Three stages of disability pension The necessary insurance period for the claim to receive the disability pension is determined by the period before the disability occurred. For policyholders who are older than 38, the necessary insurance period condition is considered as met. The insurance period is even the time of studies at high school or university in the Czech Republic before the age of 18, but not sooner than the end of compulsory school attendance, and after the age of 18 it is no more than 6 years. If the claimant does not fulfill the condition of the insurance period, he/she has no right to get the disability pension.

The amount of disability pension The disability pension consists of basic and proportional assessment. The basic pension assessment is the same for everyone. The proportional assessment depends on the levy of the pension insurance and the period of insurance. The higher the incomes and the period of insurance, the higher disability pension.

Thank you for your attention. Tomáš Schwarz Nikol Krčmová Kateřina Macháčková Nguyen Viet Tiep