Discussion paper written by Ivan Lesay analyses the Czech pension reform and its prospects. The aim of this paper is to assess the future prospects of the Czech pension reform in terms of how fundamental it can go, why, and what are the possible risks of such a move.

Download the full paper here [download id=“698″].

Foreword by Jan Drahokoupil:

There is a number of reforms that Czech public sector has to undertake. Most notably, the present shape  of pension system is not sustainable. The reform is a necessity any government will have to follow. Reforming (and thus leaving) contemporary pay-as-you-go model of the pension system is one of the main priorities. These are dominant storylines in Czech press that are also prominent among policy-makers. Political parties, both Left and Right, propose a transition from the present pension system. This, however, is a measure of an immense importance that deserves to be investigated beyond dominant clichés. Is the pension-system reform really necessary? Why? To what extent? What are the consequences of the proposals that are on the table?

This discussion paper offers a roadmap to finding answers to these questions. Ivan Lesay discusses pros and cons of proposed reforms in a very accessible way. Among others, he refutes a number of myths that accompany the discussion. He clarifies actual meanings and consequences of individual reform proposals. This reveals many of the dominant ideas to be misleading.

This text is a major contribution that allows us to understand the pension reform and to identify possible directions that it can follow. There is a lot at stake. There are many reasons to believe that the policy proposals that are actually available in the Czech Republic can have rather unpleasant consequences.

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