Social Democrats discourage financial institutions from supporting the pension reform

Bohuslav Sobotka, the chairman of the opposition Social Democrats, has called on financial institution on Friday not to offer products that would comply with the second pillar of the pension reform system, which has not been approved yet by the lower house of parliament. Mr Sobotka advised banks and pension fund providers to put off offering partly private pension funds, that the government wants to introduce with the reform, until the next parliamentary elections. If the Social Democrats win a strong enough majority in the next elections, they are prepared to revoke the so-called second pillar of the planned pension reform. Even before Mr Sobotka’s announcement, the Czech branch of ING Commercial Banking as well as AXA had announced that they will not offer the new type of pension savings scheme. The remaining seven retirement plan providers are mostly likely counting on introducing the new type of financial product, if the lower house passes the bill.

Author: Masha Volynsky