Additional Pension Insurance Scheme with State Contributions (Closed Scheme)
Penzijní připojištění se státním příspěvkem
Coverage
Voluntary participation
- Any natural persons of at least 18 years of age.
- The scheme has been closed for new entrants since 1 December 2012.
Opting out
- Since 1 January 2013, participants have been able to opt out from the scheme and relocate their accumulated capital to the supplementary pension savings scheme.
Financing
General finances
- Fully funded personal pension plans based on contribution payments (incl. state allowances) and capital revenues.
Contribution payments
- Amount of the contribution varies and can be chosen by the individual (minimum amount: CZK 100/month).
- Contribution payments can be paid by employer (in whole or in part) as an employee benefit.
State support
- State subsidies: condition of minimum participant’s contribution of CZK 300/month; for contributions of CZK 300-999/month, state subsidy is CZK 90 and 20% of the amount exceeding CZK 300; for contributions of CZK 999 and more, state subsidy is equal to CZK 230.
- Employees’ contribution payments up to a maximum amount of (CZK 24,000/year) are tax-deductible.
- Employers’ contribution payments up to a maximum amount of (CZK 50,000/year) are tax-deductible.
Administration
- Pension plan providers manage pension funds and pay benefits directly to person.
- The Czech National Bank (ČNB) grants licences, sanctions and oversees pension companies.
- Ministry of Finance (MF) pays state subsidies and supervises pension companies.
Qualifying Conditions
- Minimum age 60, minimum insurance periods can vary between 60 and 120 calendar months (specific qualifying conditions may be stipulated in the pension plan); possibility for surrender (exiting from the pension plan before fulfilling the specific conditions), minimum insurance periods: 12 calendar months (no requirements for minimum insurance periods in case of fund liquidation).
Benefits
Pension payments
- Accumulated capital through contribution payments (incl. state subsidy) and investment yields, minus administration costs/fees of pension plan provider.
- Life-long annuity paid monthly; possibility for lump sum payment; in case of death of the participant, possibility for survivor’s pension; guarantee for no losses in nominal amounts.
Taxation and social security contributions
- Only investment yields forming part of the pension payments are subject to income tax; lump sum payment and surrender are subject to capital gains tax.
- Pension payments are not subject to social security contributions.
Coverage
Financing
Administration
Qualifying Conditions
Benefits
Voluntary participation
- Any natural persons of at least 18 years of age.
- The scheme has been closed for new entrants since 1 December 2012.
Opting out
- Since 1 January 2013, participants have been able to opt out from the scheme and relocate their accumulated capital to the supplementary pension savings scheme.
General finances
- Fully funded personal pension plans based on contribution payments (incl. state allowances) and capital revenues.
Contribution payments
- Amount of the contribution varies and can be chosen by the individual (minimum amount: CZK 100/month).
- Contribution payments can be paid by employer (in whole or in part) as an employee benefit.
State support
- State subsidies: condition of minimum participant’s contribution of CZK 300/month; for contributions of CZK 300-999/month, state subsidy is CZK 90 and 20% of the amount exceeding CZK 300; for contributions of CZK 999 and more, state subsidy is equal to CZK 230.
- Employees’ contribution payments up to a maximum amount of (CZK 24,000/year) are tax-deductible.
- Employers’ contribution payments up to a maximum amount of (CZK 50,000/year) are tax-deductible.
- Pension plan providers manage pension funds and pay benefits directly to person.
- The Czech National Bank (ČNB) grants licences, sanctions and oversees pension companies.
- Ministry of Finance (MF) pays state subsidies and supervises pension companies.
- Minimum age 60, minimum insurance periods can vary between 60 and 120 calendar months (specific qualifying conditions may be stipulated in the pension plan); possibility for surrender (exiting from the pension plan before fulfilling the specific conditions), minimum insurance periods: 12 calendar months (no requirements for minimum insurance periods in case of fund liquidation).
Pension payments
- Accumulated capital through contribution payments (incl. state subsidy) and investment yields, minus administration costs/fees of pension plan provider.
- Life-long annuity paid monthly; possibility for lump sum payment; in case of death of the participant, possibility for survivor’s pension; guarantee for no losses in nominal amounts.
Taxation and social security contributions
- Only investment yields forming part of the pension payments are subject to income tax; lump sum payment and surrender are subject to capital gains tax.
- Pension payments are not subject to social security contributions.
Legal Basis: Additional pension insurance Act– Act 42/1994 Coll. as amended (zákon o penzijním připojištění se státním příspěvkem); Supplementary Pension Savings Act (Act 427/2011 Coll. as amended (zákon o doplňkovém penzijním spoření).