Czech participants in supplementary pension plans are contributing an average of about CZK 200 more per month, according to data from the Association of Pension Companies of the Czech Republic (APS).

The association attributed this increase to last year’s higher state contributions, which aimed to motivate people to make higher monthly contributions to ensure that they have sufficient financial reserves for old age.

According to data, APS participants contribute an average of CZK 1,152 to supplementary pension savings (DPS) and CZK 1,006 per month to supplementary pension insurance (PP), going beyond the “psychological threshold” of CZK 1,000.

Speaking to Právo daily, APS president, Aleš Poklop, said that the adjustment of the state contribution was the “right thing to do” and that it was the “right time to do it”.

He pointed out that the last time the allowance changed was in 2013 and suggested that when considering how economic perception is shifting and how wages are rising, it is “absolutely adequate”.

“If someone gave three hundred crowns ten years ago, the increase by two hundred crowns during this time is not drastic,” he said.

Poklop also suggested the number of Czech’s who choose more profitable but riskier strategies in retirement has seen an increase recently.

In terms of the strategy when choosing a fund, he said it depended on the age of the person and their risk aversion, indicating that, for example, if the participant has more than 10 years left until the end of savings, they should choose dynamic or alternative funds, as they “bring the best value in the long run”.

He stated that dynamic funds have had an average net appreciation of 6.5 per cent over the past decade and an almost 10 per cent net appreciation over the past six years.

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