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The Czech Pension System and the Perspectives of Its Reform

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  • Michal Slavík

Abstract

This essay describes the Czech pension system, provides a brief history of its modern transformation and mentions some of its drawbacks which should be the subject of a future policy debate. Particular attention is devoted to the third pillar and to the importance of a well-functioning capital market as one of the key conditions for the further development of funded pillars. The question of the timing of the enhancement of the funded pillars in a robustly growing economy with a limited capital market is opened. A lack of new private shares and bonds issues on the domestic capital market may be one of the arguments for postponement of the funded pillars' strengthening. A focus of policymakers who will set up the pension system reform strategy should be concentrated on comparing transitional and transaction costs of each reform alternative and on the building of an efficient regulatory and supervisory infrastructure. They should, instead of enforcing involuntary savings in pension funds, seek measures that will help to create a savings-friendly and growth-oriented economic environment.

Suggested Citation

  • Michal Slavík, 2006. "The Czech Pension System and the Perspectives of Its Reform," Prague Economic Papers, Prague University of Economics and Business, vol. 2006(3), pages 214-230.
    • Handle: RePEc:prg:jnlpep:v:2006:y:2006:i:3:id:285:p:214-230
    DOI: 10.18267/j.pep.285
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    References listed on IDEAS

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    1. Heikki Oksanen, 2004. "Pension reforms: an illustrated basic analysis," European Economy - Economic Papers 2008 - 2015 201, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    2. Mr. N. A. Barr, 2000. "Reforming Pensions: Myths, Truths, and Policy Choices," IMF Working Papers 2000/139, International Monetary Fund.
    3. Peter Diamond, 1998. "The Economics of Social Security Reform," NBER Working Papers 6719, National Bureau of Economic Research, Inc.
    4. Dariusz Stanko, 2003. "Polish Pension Funds, Does The System Work? Cost, Efficiency and Performance MeasurementIssues," Public Economics 0302001, University Library of Munich, Germany.
    5. Heikki Oksanen, 2004. "Pension Reforms: An Illustrated Basic Analysis," CESifo Economic Studies, CESifo, vol. 50(3), pages 569-625.
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    Cited by:

    1. Marek Loužek, 2007. "Pension Reform in the Czech Republic - A Contribution into the Debate," Prague Economic Papers, Prague University of Economics and Business, vol. 2007(1), pages 55-69.
    2. Meiram Zhandildin, 2015. "Pension System Reform in Emerging Countries," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 7(1), pages 65-88, January.

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    More about this item

    Keywords

    pension system; pension reform; social security;
    All these keywords.

    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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