Document 270 - Amendment to the Pension Insurance Act

Scope: Sections 29–67; pages 1–6.

The amendment introduces, effective January 1, 2028, a new entitlement to a regular old-age pension for individuals who have reached retirement age and have accumulated at least 25 years of insurance coverage. This does not involve a reduction in the retirement age or early retirement; the pension amount will continue to be based on the actual period of insurance and earnings, without making up for missing years to reach 35 years. The new provision will also apply to people who reached retirement age earlier but have not yet met the requirements, provided that their entitlement does not arise before 2028. The proposal preserves pensions already granted and adjusts the rules for concurrent benefits as well as the crediting of additional work after eligibility has been established.

Scope: § 67–§ 67a; pages 1–5.

The amendment preserves the inclusion of the pension increase for a child raised in the family in the base for both regular and extraordinary pension indexation and for the increase for work while receiving a pension. This prevents the original child-rearing allowance—up to 500 Kč per child—from being excluded from indexation starting in 2027. The rule will also apply to previously granted pensions; the payer will automatically implement the increases and any retroactive payments, generally no later than April 30, 2027. The proposal may increase pension expenditures and requires adjustments to payment procedures.

Scope: Sections 36–27; pages 1–23.

The amendment introduces, effective in 2028, the option to receive a portion of an early old-age pension while working no more than half-time during the last year before reaching the regular retirement age. Eligibility requires at least 42 years of insurance coverage and a specified recent employment history; the portion of the pension paid will be reduced based on earnings and will not replace a later pension increase for work performed without receiving the pension. Payments will be made in advance and settled quarterly, with a duty to inform the applicant, the option to file objections, and the use of data provided by employers. The rule on concurrent pensions is also changing: a pension paid at the new partial rate will also be considered a full old-age pension.

Scope: Sections 19a–63; pages 1–15.

The amendment introduces a recalculation of old-age and disability pensions granted before 2027 to provide additional recognition for past personal care provided to individuals with a higher degree of dependency. Starting in January 2028, such care will be counted as income in the original calculation, and the more favorable result will always be paid out, meaning the pension cannot be reduced. The Social Security Administration is to recalculate eligible cases on its own; others may apply by the end of 2032, with any additional payment due from 2028 without the usual five-year limitation.

Scope: Part C–Part G; § 59–§ 40b; pages 1–28.

The amendment expands protection for widowed individuals with a third-degree disability: in addition to a higher pension, they would receive the full percentage rate from a second pension as well, effective July 1, 2027. The remuneration for work performed after becoming eligible for a pension but not yet receiving it is changing: the current 1.5% increase for every 90 days is replaced by a continuous monthly increase amounting to 11% of the calculation base annually, effective in 2028. Self-employed retirees are to receive the pension increase automatically based on data from the Social Security Administration, without having to submit a separate application. Couples eligible to share earnings are to receive a free joint informational calculation of their future pensions, both with and without earnings sharing.

Scope: Part Four–Part Seven; § 1–§ 86; pages 1–22.

The amendment repeals the government’s proposed extension of the age-based pension increase starting at age 80 and retains the current increases starting at ages 85 and 100. Instead, it allocates at least 5 billion CZK for investments in residential, day, and community-based social services from 2027 to 2029. Starting in 2027, half of any pension insurance surplus is to be used to finance these services, and the other half is to be added to the earmarked pension reserve. The proposal sets forth the conditions, oversight, and disclosure requirements for subsidies and repeals the planned abolition of the reserve account as well as the transfer of its balance to the state’s general revenue.