Dynamic pension funds have continued to deliver strong returns, reinforcing their role in helping savers protect retirement income against inflation, according to data from the Association of Pension Companies (APS) of the Czech Republic.

Figures showed that dynamic funds achieved an average return of 16.5 per cent last year, marking the third consecutive year of double-digit growth.

Over the longer term, the association highlighted that dynamic funds have delivered an average annual return of 7.15 per cent over the past decade, underlining their ability to outperform inflation and support retirement outcomes.

The findings come after a period of elevated inflation, particularly in 2022 and 2023, when price growth exceeded 10 per cent, emphasising the importance of investment strategy in maintaining purchasing power.

Meanwhile, balanced funds have also delivered steady long-term performance, with a 10-year average return of 4.14 per cent, broadly keeping pace with inflation.

In contrast, conservative funds recorded returns of 1.31 per cent, reflecting their lower-risk positioning for savers nearing retirement.

Industry calculations from the APS also highlighted the significant impact of higher returns over time.

For example, an individual saving CZK 1,500 per month over 20 years, alongside a CZK 300 monthly state contribution, would accumulate more than CZK 500,000 at a 1.5 per cent return.

However, at a 6.5 per cent return, total savings would increase to CZK 864,000, with CZK 430,000 generated through investment returns, demonstrating the long-term benefits of higher-yielding strategies.

---