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Czech Chamber outvotes Klaus's veto on pension reform

Czech Chamber outvotes Klaus's veto on pension reform

08.11.2012 9:24
Autor: ČTK

The Czech Chamber of Deputies outvoted President Klaus's veto on the second pillar of the pension reform that will thus take effect next year. The law introduces the "second pillar" of the pension reform enabling Czechs to send part of their pension insurance contributions to private accounts managed by pension funds, instead of the state-run pay-as-you-go system. It enables them to send 3 percent of the insurance sum to a private account if they add 2 percent to it from their own money.

When vetoing the bill, Klaus said it lacked the necessary consensus of experts and politicians and in society.

The pension reform is a crucial change to the welfare system, which has a long-time effect and concerns everyone, Klaus wrote when explaining his decision on his website.

The legislation actually ends the pension reform that was already passed.

It was supported by 102 deputies, while 101 were needed.

Finance Minister Miroslav Kalousek (TOP 09) warned that if the current legislation were not passed, people would have the right to save in the second pillar, but it would be impossible to implement it.

"An undescribable chaos would emerge and naturally also the risk of the relevant compensation to the damage incurred," Kalousek said.

The bill is connected with the postponement of the establishment of a single collection place by two years till 2015 and with the legal redirection of payment to the tax authority.

The government concept of the pension reform has been sharply criticised by the opposition. Its representatives say it is only advantageous for the rich.

The opposition also argue that the changes would deepen the budget deficit.

The opposition Social Democrats (CSSD) are demanding a two-year postponement. They have said if in power, they would cancel the second pillar.

The Communists are of a similar opinion.

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