Key Changes in Old-Age Pensions as of 2026

Increase in the Retirement Age

For insured persons born after 1988, the retirement age is newly set at 67 years. For persons born between 1974 and 1988, the retirement age will gradually increase. To the age of 65 years and 8 months, a number of calendar months corresponding to the difference between the insured person’s year of birth and the year 1973 will be added.

Slower Growth of Newly Granted Pensions

In the coming years, the replacement ratio of newly granted pensions to previous earnings will gradually decrease. This will be achieved through two parameter changes in the pension calculation formula.

Until the end of 2025, the calculation base for the percentage assessment of the pension was determined from the personal assessment base in such a way that 100% of the personal assessment base was included up to the first reduction threshold. From 2026 onwards, this percentage will be reduced by one percentage point annually until it reaches 91% in 2034 and ultimately 90% from 2035.

At the same time, the percentage assessment of the old-age pension will also be slightly reduced. Until the end of 2025, an insured person accrued 1.5% of the calculation base for each full year of the pension insurance period. From 2026, this rate will decrease annually by 0.005 percentage points until it reaches 1.455% in 2034 and 1.450% from 2035.

Lower Reduction of Early Old-Age Pensions for Persons with 45 Years of Insurance

In our Forvis Mazars Tax View of September 2024, we reported on the tightening of the conditions for granting early old-age pensions, i.e. pensions granted prior to reaching the statutory retirement age. As of 2026, however, the rate of reduction of early old-age pensions will be lowered for persons who have completed at least 45 years of the pension insurance period.

For such persons, the percentage assessment of the pension will not be reduced by 1.5% of the calculation base, but only by 0.75% for each commenced 90 calendar days from the date of granting the early old-age pension until reaching the statutory retirement age.

Reduction in Pension Insurance Contributions for Working Pensioners

We would also like to recall that as of 2025, old-age pensions are no longer increased for gainful activity performed while receiving a full old-age pension. This benefit has been replaced by a 6.5% reduction in pension insurance contributions calculated on the assessment base.

Outlook for 2027

From 2027, the pension reform will significantly change the way in which the state takes into account childcare and care for dependent persons. The current child-raising allowance (CZK 500 per child) will be gradually limited, and care will newly be compensated through a notional assessment base of the caregiving person.

At the same time, as of 2027, partners will be able to apply for a shared assessment base (sometimes referred to as a family assessment base). This new instrument is intended to reduce differences in pension entitlements between partners, particularly in families where one partner has long-term childcare responsibilities while the other has focused more on his/her career.

In light of the gradual entry into force of the individual measures and their impact on the personal situation of insured persons, we recommend paying increased attention to retirement planning. Should you require assistance, we will be pleased to help you assess your specific situation and determine the most appropriate course of action in light of the current and forthcoming legislative framework.

Authors:

Jana Nováková, Tax Department Manager

Gabriela Ivanco, Tax Department Manager