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Pension plans in Prague

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The retirement age in the Czech Republic is 63 years old (this will increase to age 65 for men and women from 2030). The Ministry of Labour and Social Affairs overseas the Czech Social Security Administration. A large segment of the population draws on the funds, about 31 percent of the Czech Republic's 10.5 million people. The system consists of two parts, which is unusual as most other countries have three pillars.
Mandatory basic pension insurance - Funded on a running basis (pay-as-you-go or PAYGO), the system provides for all economically active individuals. The basic pension insurance also covers: old-age, disability, widow and widower, and orphans.
Voluntary complementary additional pension insurance - Paid for by state contributions, this additional pension insurance includes products offered by commercial insurance companies - particularly life insurance. Only a few Czech people invest in this scheme.


To support the fund, employers pay 21.5% of payroll, employees 6.5% of earnings. The self-employed pay 28% of their earnings.

The state pension is made up of a flat-rate pension of 2,170Kc a month plus an earnings-related amount. The earnings-related amount is based on 1.5% increase for each year of insurance. The pension is calculated on 100% of average revalued earnings up to CZK 15,000 a month, then 30% up to CZK 27,000 and 10% on the balance. Average earnings are based on earnings between 1986 and retirement, up to 30 years from 2016.


If a person meets the conditions of several pensions (such as old-age and disability), then the highest paid pension will be paid.

Since January 1st, 2010 the required period of work history has been lengthened. When determining the minimum amount of years active in the work force, the crucial fact is the calendar year.

    For example:
  • If a pensioner reaches retirement before 2010, the required period of work history is 25 years
  • If a pensioner reaches retirement in 2010, the required period of work history is 26 years
  • If a pensioner reaches retirement in 2011, the required period of work history is 27 years
  • If a pensioner reaches retirement after 2018, the required period of work history is 35 years

Other factors may affect retirement like sex (females can generally collect pensions earlier) and if they have raised children.

Update 27/01/2011


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