Czech Households’ Pension Demands Rose to CZK 17,460 billion in 2020
Photo credit: KK for Brno Daily.
Prague, Feb 15 (CTK) – The pension demands of Czech households, meaning the total amount of pension claims they are entitled to, reached around CZK 17,460 billion at the end of 2020, up CZK 24 billion from 2019, and equivalent to 305.8% of GDP, according to the Czech Statistical Office (CSU) today.
Pension demands have thus increased by 4.7 percentage points in relation to GDP, year-on-year.
Most of the total pension demands are within the first pillar, the state pension insurance system. About 3% are finances that individuals have saved in voluntary additional pension insurance. In 2020, their volume rose from CZK 486 billion to CZK 526 billion.
Old-age pensions make up three-quarters of the total volume of pension demands in the first pillar, followed by disability pensions (14%) and pensions for widows, widowers and orphans (11%). In the case of old-age pensions, as well as pensions for widows and orphans, women have the most pension claims; in the case of disability pensions, the proportion of men and women is balanced.
Some 3.64 million pensions are paid in the first pillar, out of a total population of 10.5 million.
European Union member states are obliged to release estimates of their pension demands once every three years. The Czech Republic last published this data in 2018. The CSU also publishes this data for the years in between on a voluntary basis.
Statisticians have long warned of problems in the pension system, and the necessity of reform is broadly discussed in most EU countries.
The pay-as-you-go pension system, which is the key mechanism of pension funding in European countries, is becoming financially unsustainable due to the ageing population and rise in life expectancy.