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Study: Czech pension system ignoring pensioners’ work

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Prague, Oct 6 (CTK) – The pension system in the Czech Republic does not sufficiently take into account the work after retirement, a study on the incomes of the elderly, published by the Institute for Democracy and Economic Analysis (IDEA), said on Friday.

If elderly persons with the average earnings work one year more after the age at retirement, but do not get the pension, this will only be profitable for them after 28 years, the study said.

After retirement, work is continued by some 13 percent of Czechs, while the EU average is 15.5 percent. In Nordic countries, as many as 35 percent of the elderly keep working.

In the Czech Republic, people can stay at work even after retirement. They still pay the income tax as well as social and health insurance.

In addition, pension is raised by a certain percentage for the time spent at work. If the working pensioners give up one-half of the pension or the whole sum, the rise is even bigger.

If they work for a year without getting the pension, there is a rise by 7.6 percent.

In fact, it is beneficial to the pensioners, state coffers and society alike if people keep working.

The pensioners have extra incomes, the budget gains taxes and compulsory payment and society does not lose the human capital and valuable expertise, the study said.

It said the development had shown that the Czech labour market was able to “absorb well” the elderly manpower.

The jobless rate is at a record low. After retiring, the income of most people considerably falls. Their incomes are on average 42 percent smaller.

In the Czech Republic, roughly four-fifths of people retire only because they reached the age at retirement and are eligible for the pension from the state.

One-fifth of Czechs retire due to bad health, loss of work or other obstacles.

According to another study in which IDEA experts compared election programmes, parties do not suggest any measures to support working pensioners and to increase their readiness to keep working.

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