Page 10 - IDEA Study 3 2015 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. 8