Czech News Daily

Pension reform to cost billions annually

The pension reform supported by a majority of a pension expert commission would entail so-called transformation costs caused by the obligatory three-percent redirection of a part of the insurance premiums from the public system to individual savings. Vladimir Bezdek, the head of the commission, says that the transformation costs will fully disappear in about 60 years. He estimates the costs at approximately CZK 30 bln yearly on average in the first fifteen years. The transformation costs are supposed to cease to exist in the moment when only people, to whom the redirection of a part of insurance premiums applied, will receive pensions.  Pravo 14