Pension Reform in the Czech Republic: Present Situation and Future Prospects (A Comparison with Austria)

This paper deals with present situation and future development of pension reform in the Czech Republic. A comparison with neighboring country - Austria, has been done. Parametrical reforms of pay as you go systems in both countries are compared and evaluated. Pretensions to introduce the multi-pillar pension system are commented and appraised. Some opacities in current definitions of private pension systems are mentioned. Specific risks of different pillars are introduced, together with the necessity to monitor costs of the pension administrative itself. Aging of the society and public budgets deficit are very important circumstances influencing the pension policy, however, the main aim of reforms should be the creation of a modern system, supporting the maintenance of the living standard of the elderly. Well functioning labour market and developed financial market for a modern pension system are indispensable.