With the new year, a pension law amendment has come into force, which brings many positive changes to the pension system. While the previous news touched on the main purpose of the amendment, which represents an increase or reward for work activity among older workers, we also present some interesting points below.
As stated in the previous regulation, a person can retire at the age of 65, if he or she has at least 15 years of insurance period, or at the age of 60, if he or she has at least 40 years of pension qualifying period. The age limit may, however, be lowered for the insured person due to the care of every child born or adopted (in the first year of the child’s age), to compulsory military service and to enter compulsory pension and disability insurance before the age of 18 years.
The conditions for early retirement, however, do not change with the arrival of year 2020 and thus the pension amendment, which means that a person must be 60 years of age and have 40 years of pension qualifying period. The well-received change represents a higher percentage rate, which will amount to 63.5 % of the pension base for 40 years of the pension qualifying period for women, however, for men it will gradually increase over the six-year period until it is equal to the percentage for women.
Another positive novelty is the possibility of raising the pension for each child by 1.36 %, but not for more than three children, with the mandatory condition that the person exercising the said option does not retire early.
Last but not least, retirement is currently the most favourable for Austrians, Italians, Luxembourgers, Portuguese and Turks – pensions are, on average, only a tenth lower than their salaries. However, the British, Mexican and Lithuanian are the least happy about retirement, with their pensions averaging a third of their income.