Parliament has approved legislation — the Act on Mandatory Contribution to Old Age Savings Products — that would entitle employees engaged in certain hazardous work to receive employer-paid contributions to their private retirement savings accounts. In Czechia, employers are obligated to categorize the work performed in their workplaces into four hazard categories — one through four, from least to most hazardous — defined in Decree 432 of 2003. The new legislation would apply only to employees who perform category three work “for the working condition factors of vibration, cold exposure, heat exposure or total physical stress, if it concerns the stress during dynamic physical work performed by large muscle groups” for at least three shifts in a month. Hazard category four workers are not included because, under recent reforms, these employees may be eligible for unreduced social security early retirement benefits. The act takes effect January 1, 2026, pending formal approval of the president and prime minister as well as official publication.
Employers should prepare for the act’s implementation and determine if they have any employees who are engaged in hazard-level three work and to what extent. Currently all employees may elect to contribute to individual defined contribution accounts with private pension funds that employers may also contribute to. Of the two-thirds of companies surveyed by WTW that offer supplemental retirement benefits to their employees in Czechia, the majority do so via contributions to the employees' individual accounts, providing 3.0% of pay at the median (where the contribution is defined as a percentage of pay).
It should be noted that parliamentary elections are scheduled for October, and the current opposition party (which is ahead in polls) has indicated that it would introduce legislation to reverse these changes.
