Supplementary Pension Savings Scheme

Voluntary participation

• Any natural persons, without age restrictions.

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 contribution is CZK 90 and 20% of the amount exceeding CZK 300; for contributions of CZK 999/month and more, state contribution is equal to CZK 230.
• Employees’ contribution payments up to a maximum amount (CZK 24,000/year) are tax-deductible.
• Employers’ contribution payments up to a maximum amount (CZK 50,000/year) are tax-deductible.

• Pension plan providers manage pension funds and may pay benefits directly to person.
• Licenced insurance providers conclude contracts with participants for payment of pension benefits.
• The Czech National Bank (ČNB) grants licences, sanctions and oversees pension companies.
• The Ministry of Finance (MF) pays state subsidies, administrates IT system of the scheme and supervises pension companies.

• Minimum age 60, minimum insurance periods: 60 calendar months (or fulfilling some specific conditions concerning the payment of benefit); possibility for surrender (exiting from the pension plan before fulfilling the specific conditions), minimum insurance periods: 24 calendar months (no requirements for minimum insurance periods in case of fund liquidation).

Pension payments

• Accumulated capital through contribution payments (incl. state subsidies) and investment yields, minus administration costs/fees of pension plan provider.
• Life-long or fixed-term annuity paid monthly; possibility for lump sum payment; possibility for transferring the accumulated capital to a chosen insurance company (subsequent benefit is to be paid at least 4 times per year in regular non-decreasing instalments and for at least 3 years); in case of death of the participant, possibility for surrender to person specified by the deceased/heirs.

Taxation and social security contributions

• Only investment yields forming part of 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.