Government to link pension rises to inflation alone

The new Czech government is planning to link increases in old age pensions to inflation alone from 2012, Hospodářské noviny reported. The move would mean pensions grew at a slower pace and would save the state CZK 5.5 billion a year, the newspaper said. Currently pension rises are calculated according to both inflation and growth in real wages. The minister for social affairs, Jaromír Drábek, said the government planned to introduce the change as part of broader reform of the pension system. Meanwhile, Prime Minister Petr Nečas said tying pension growth to inflation alone should be brought in gradually over several years.