Czech pensions: unravelling | beyondbrics

Czech pensions: unravelling | beyondbrics:

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Six months into its launch, the Czech Republic’s reformed pensions system is sputtering and could be headed for a tail spin. People aren’t buying into the system, and the second collapse of the government in as many months has made any bolstering of the reform unlikely.

The reform was introduced in January by the centre-right administration of then premier Petr Necas. It added a second, private-funded “pillar” to the existing pay-as-you-go system. The hope was that half a million Czechs would subscribe to the second pillar in its first six months and that eventually 2.5m, in a population of 10m, would join. But by July, barely 80,000 had joined up.

Necas resigned in June under a cloud of scandal, and on his way out blamed the negative publicity from the left for the second pillar’s subpar results."

'via Blog this'