Page 10 - IDEA Duchodova studie

INTRODUCTION

In the Czech Republic, the current demographic situation and its projection represent
major challenges to the sustainability of the public pension and health system. The
Czech population is aging and will be living longer than previous generations – more
than twenty years ago, in 1992, the life expectancy of Czech men aged 50 was on
average 72.6 years; for women aged 50 it was 78.6 years. In 2012, however, men aged
50 could expect to live another 27.3 years, while women of the same age had 32.4
years of life ahead of them. According to the Czech Statistical Office's (CSO) median
prognosis, the number of people in the country over 65 years of age will double by the
year 2050, and the number of people over 85 years of age will be three times higher
than it is currently.

On the one hand, the Czech population is aging as a result of increasing longevity
related to improvements in health and health care, physically less demanding work,
and rising quality of social care and life in general. On the other hand, there has been
a long-term decline in fertility – after 1992, when the overall birth rate was 1.72
children per woman, this indicator steadily declined to 1.45 in 2012 (CSO, 2014).
According to the CSO, the proportion of the population of active age (15-64 years) will
fall from 68 percent today to below 54 percent in 2050.

These demographic changes represent one of the main challenges for the
sustainability of public finances and the pension system. They are reflected in the EU
Council's findings that the Czech Republic is facing long-term sustainability risks,
largely due to projected increases in pension and healthcare expenditures. In its
recommendations, the EU Council requested that the Czech Republic speed up the
pace of increasing the statutory retirement age1, promote the employability of older
workers, remove public subsidies for early-retirement decisions, significantly
improve the cost-effectiveness of healthcare expenditure, and implement
standardized procedures for regular increases in the statutory retirement age.
Needless to say, Sobotka’s government has expressed disagreement with proposals
for such a rapid increase in the statutory age.2

One of the few major policies available with the aim of prolonging older workers'
productive and socially bearable participation in the labour market is the

1 Ensure the long‐term sustainability of the public pension scheme, in particular by accelerating the
increase of
the statutory retirement age and then by linking it more clearly to changes in life expectancy.
Promote the
employability of older workers and review the pension indexation mechanism. Take measures to
improve
significantly the cost‐effectiveness and governance of the healthcare sector, in particular for hospital
care. Internet: http://ec.europa.eu/europe2020/pdf/csr2014/csr2014_council_czech_en.pdf
2 Government press release, June 2014: The Government has a negative attitude to the draft of
recommendations on accelerating the retirement age. The Government considers even the current
pace relatively high, and this brings with it many social problems. Such a fundamental systemic
change in the pension system is unacceptable for the Government.

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