The Czech Republic is preparing a large-scale reform of voluntary pension savings aimed at encouraging citizens to start saving for old age as early as possible. Legislative changes provide for increasing state contributions, introducing new investment strategies, and reducing pension savings management costs.

According to the Czech Ministry of Finance, the relevant bill called Lepší penzijko (“Better Pension Savings”) was approved by the government on August 24, 2026.

On November 6, the Chamber of Deputies of the Czech Parliament completed the second reading of the bill, after which the document moved to the final stage of consideration. During the discussion, deputies proposed almost 50 amendments. Therefore, the final provisions of the reform may still change.

State contributions for children’s pension savings
One of the main innovations of the reform is the expansion of state support for pension savings for children and youth.

In the Czech Republic, it is already possible to open pension accumulation accounts in the name of minors. However, the new bill proposes to make participation in the program more accessible for families who cannot set aside significant amounts monthly.

In particular, for children under 18 years old, the minimum monthly contribution required to receive state support is planned to be reduced to 100 Czech crowns.

At the same time, for program participants under 30 years old, the state contribution rate is proposed to increase from 20% to 40% of the monthly payment amount.

Thus, if parents transfer 100 crowns monthly to the child’s pension account, the state will add another 40 crowns to their savings.

For a contribution of 1700 crowns per month, which is the maximum amount for calculating state support, the additional payment will be 680 crowns instead of the current 340 crowns.

The Czech government expects that this mechanism will encourage parents and grandparents to open pension accounts for children at an early age.

The idea is that savings can be invested over a long period, and the investment income earned will increase the future pension capital.

Youth will be allowed to withdraw part of pension savings early
Another provision of the bill concerns the possibility of using part of the accumulated funds before reaching retirement age.

It is proposed to allow program participants up to 36 years old, after at least ten years of accumulation, to receive up to one-third of their own contributions along with income from their investment in a lump sum.

At the same time, citizens will not need to terminate participation in the pension program. The remaining accumulated funds will remain in the account and continue to be invested.

Such early withdrawal of part of the savings will not entail penalties, and the use of the money will not be limited to a specific purpose.

Currently, a similar possibility in the Czech pension savings system is provided only under certain conditions for young participants aged 18 to 20 years.

Pension funds will change investment strategy depending on age
The reform also provides for the introduction of a life-cycle investment strategy, where the investment structure will depend on the participant’s age and the time remaining until retirement.

At the initial stages of accumulation, most funds can be invested in assets with higher return potential but also higher risks.

According to the government proposal, for participants under 50 years old who choose this strategy, the share of dynamic investments will be at least 75% of the portfolio.

As retirement approaches, accumulated funds will gradually be transferred to more conservative financial instruments. This approach aims to reduce investment risks in the final stages of pension capital formation.

At the same time, citizens will be able to independently choose a different investment structure according to their preferences.

For clients who choose the life-cycle strategy as the basic option, it is proposed to cancel the mandatory investment questionnaire.

Pension fund fees to be limited to 0.5% per year
A separate direction of the reform concerns reducing citizens’ costs for managing pension savings.

The Czech government proposes to abolish the performance fee for transformed, conservative, mixed, and dynamic pension funds.

At the same time, the maximum annual asset management fee is planned to be limited to 0.5%.

The changes will not affect alternative investment funds, for which current payment conditions will be maintained.

The Czech Ministry of Finance emphasizes that even relatively small regular fees over decades can significantly affect the final size of pension savings.

Reducing such costs should allow fund participants to retain a larger portion of investment income.

Another proposed change provides for the gradual cessation of transformed pension funds, characterized by conservative investment policies and relatively low returns.

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