ke stažení - Pojistný obzor

Insurance Digest
It is impossible to build on one
strategy
The present pension system
in the Czech Republic does
not function well anymore.
Is there a way out of this
complex labyrinth We
asked Mr Vladimír Bezděk.
EMA NOVOTNÁ
EDITOR-IN-CHIEF
Mr. Bezděk, you worked at the Commission
for the Preparation of the Back-up
Materials for the Decision on the Pension
Reform 1 . Could you please explain to the
readers how many of the reform proposals
were considered Who submitted them
and what were they based on
The proposals were submitted by separate
political parties represented in the Czech Republic’s
Parliament. It means there were five
different variants and, of course, a “no policy
chase” scenario. I assume that the variants
reflected the political boundaries of the specific
party, as well as personal attitudes of the
parties’ specific representatives on the Commission.
Were some of the proposals inspired by reforms
carried out abroad
The political parties were definitely inspired by
reforms abroad. For example, the Czech Social
Democratic Party (in Czech abbreviated as
CSSD) came up with the so-called NDC system
that was first developed in Sweden. The
Christian and Democratic Union-Czechoslovak
People’s Party (in Czech abbreviated as KDU-
CSL) suggested a reform of the opt-out type
which combines features of several Central
European reforms.
Can we learn from the mistakes of our
Polish and Slovak neighbours In what criteria
aren’t their reforms suitable for the
Czech Republic
Sooner or later you discover a certain flaw
in each reform, in each human creation. Of
course, in general, it is good to avoid mistakes
of others and, on the contrary, to copy their
successes.
If we look at the Slovak reform, I consider
the “reorganization” of the state pillar 2 as its
weakest point. The Slovaks rested their state
pillar on the “merit” base: this means that
the more you put in, the more you get. In my
opinion, this first pillar should be based on solidarity
because the second pillar, i.e. payments
to private funds (in Slovakia this totals 9% of
salaries) is already merit-based. Without a reasonable
proportion of solidarity, there is a danger
that in five, ten years Slovakia may have
big problems, there will be social tension.
In Poland, the reform was not properly prepared
in terms of organization and administration.
In the first years after the reform, the
Polish analogy of the Czech Social Security Administration
had immense difficulties with elementary
matters, such as, for example, correct
and timely record-keeping of participants
and their contributions.
What should definitely be inspirational for
us
Diversification of the system, for sure. We
cannot build the pension system solely on one
strategy, i.e. on the payg pension system 3 .
It works well while the population is mostly
young. Today, it takes 28% of our salaries,
and it may not be sufficient in the future. It
is necessary to strengthen the support of the
system with a fund pillar, and also to reinforce
the existing private supplementary pension insurance
pillar.
Can you please give us major reasons why
it is impossible to continue in the existing
pension system
At present, we have over two million pensioners
and 95% of them are dependent on
the income from the state. As the population
grows older and older, there will be less and
less money for pensions in the system. If the
system is not diversified, the weakening flow
of money to the state pillar will mean a growing
risk of poverty for a considerable part of
the population.
Why wasn’t there the will among Czech
politicians to make a major reform of the
pension system earlier
The reason, in my opinion, was buck-passing
and populism of politicians across the political
spectrum. They may have also been, quite ordinarily,
afraid to defend decisions that will be
irreversible. On the part of politicians, the pension
system may also represent an instrument
allowing them to win voters – short-term – before
elections, so they simply give pensioners
a few quids more. If this pillar gets weaker,
the space for this will get narrower.
At the beginning of July, the Minister of
Labour and Social Affairs 4 came up with
a proposal that would allow citizens to
transfer only 3% of payments for pensions
to pension funds 5 . Is it acceptable from the
point of view of the insurance market
As far as I know, no specific written proposal
for opt-out has come out from the Ministry
so far. Only speculation about this option
appeared for the umpteenth time in the
media. In my opinion, such a low opt-out is
insignificant. It will not bring any meaningful
spread of income between the pension and
The continuous pension system works well while
the population is mostly young. We must support it
with a fund pillar and to reinforce the existing private
supplementary pension insurance pillar.
42 Pojistný obzor 3/2008 Insurance Digest