Since 2013, in the Czech republic, you can arrange supplementary pension savings, which replaced the supplementary pension insurance, which is no longer possible to arrange since the same year. It belongs to the III. Pilar of the Czech pension system, so it is completely voluntary. This is the great way to evaluate your finances, so that you can supplement your monthly pension towards retirement or have the option of retiring early.
The function of supplementary pension savings is similar to classic mutual funds, with the difference, that you are entitled to a state allowance. The minimum deposit amount is 100 CZK per month, but in order to receive the state allowance, you must save at least 300 CZK per month. This allowance then amounts to 90 CZK. The amount to reach the maximum allowance is 1 000 CZK, in this case you will reach the state allowance of 230 CZK. However, there will be some adjustments from 2024 – participants who save less than 500 CZK will have their allowance withdrawn completely, on the other hand, those who save at least 1 700 CZK per month will have their allowance increased up to 340 CZK, which works out to a nice sum of 4 080 CZK per year. Another advantage is annual tax allowance (or rebates?).
As already mentioned above, the principle of operation of supplementary pension savings is similar to the operation of mutual funds. You can choose from 3 strategies here – conservative, balanced or dynamic. There are certain differences between portfolios and of course their performance? also depends on this – the dynamic portfolio is mainly invested in shares, it is associated with bigger risk but of course also with greater profitability. On the other hand, conservative funds focus more on bonds or bank deposits.
Currently there are 9 pension companies operating in the Czech republic:
- Allianz
- Conseq
- Česká spořitelna
- ČSOB
- Generali
- KB
- NN
- Rentea
- UNIQA