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PENZIJNÍ SPOŘENÍ SE STÁTNÍ PODPOROU V ČESKÉ REPUBLICE: SPÍŠ PODPĚRA NEŽ PILÍŘ IDEA 2020
  Study 4 / 2020
Pension savings schemes with state contributions in the Czech Republic: a prop rather than a pillar
AUGUST 20202 JIŘÍ ŠATAVA
Summary
 The third pillar should appropriately complement the first pillar, which is the cornerstone of the pension system. It should therefore be set up such that the level of payments from third pillar savings reflects how great a proportion of people’s net incomes is replaced after retirement by their old age pension from the first pillar.
 In this study we analyse working people’s savings behaviour dependent on how large a proportion of their net incomes will be replaced, once they retire, by their state pension from the first pillar. The first pillar old-age pension pays out a lower proportion of incomes for employees with higher salaries and for the self-employed in particular. Payments from third pillar savings should therefore play a larger role for these people.
 The share of self-employed people participating in the third pillar is almost ten percentage points lower than the share of employees. In all age categories, participation among the self-employed is at approximately this level or lower. The differences in third pillar participation between self-employed and employed people do not, therefore, reflect the differences in their net income replacement ratios.
 However, the self-employed people who do decide to save for their pension via the third pillar put aside a higher proportion of their earnings than employees, albeit only by one percentage point. This higher relative deposit rate among the self-employed is not sufficient to eliminate the differences in net income replacement ratios between employees and the self-employed.
2 This study represents the authors’ own views and not the official position of the Czech Academy of Sciences’ Economics Institute nor of the Charles University Centre for Economic Research and Graduate Education (CERGE). The author is grateful to Daniel Münicha and Filip Pertold for their valuable comments and advice. The study was produced with support from the Czech Academy of Sciences as part of its AV21 Strategy programme.
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