Lower house approves government’s pension reform

07-09-2012

The lower house has approved the government’s pension reform, overriding the Senate’s veto of the bill. The legislation, which should take effect next year, introduces a so-called “second pillar” of the pension system which will open the way for transfers of money from the state pension system to individual accounts in private insurance companies. People will also be able to transfer three percent of their social security insurance to private pension companies on the condition that they add two percent on their own. The opposition Social Democrats have criticized the second pillar for serving only a select group of rich clients. Party leader Bohuslav Sobotka has said his party would scrap the second pillar when it came to power.