The Government of the Czech Republic has approved a proposal to repeal the second-pillar pension system by January 2016.
After this time it will not be possible to continue to save under this system. Participants will receive their saved money back by the end of 2016.
The second pillar was voluntary but it was not possible to leave it at any time. Employers paid 3% from gross salary and the employee contributed the other 2%.
Participants of this pillar will have the option of receiving payment of the saved money either directly to a bank account or via a cash withdrawal slip. It can also be transferred to private pension insurance.
However in order to maintain the percentage amount of the state pension, participants will be required to pay the premiums for pension insurance individually. It will be possible to save for retirement only in the third pillar. The third pillar of the pension system is voluntary private pension insurance, and the participants can leave it at any time upon payment of contractual penalties.
We are currently obtaining further information and will keep you informed about any future news as we receive it. Please do not hesitate to contact us if you would like assistance with this change.
Get in touch with our experts in the Czech Republic.
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