Work detail

Assessing Sustainability of the PAYG Pension System in the Czech Republic and the Effect of Automatic Balance Mechanism

Author: Bc. Lukáš Pokorný
Year: 2022 - winter
Leaders: doc. Petr Janský Ph.D.
Consultants:
Work type: Bachelors
Language: English
Pages: 62
Awards and prizes:
Link: https://dspace.cuni.cz/handle/20.500.11956/171279
Abstract: The financial sustainability of pension systems facing the ageing population is subject
to extensive discussion by researchers. This thesis aims to assess the financial
sustainability of the Czech PAYG pension system and then to design the Automatic
Balance Mechanism (ABM), which is a recently developed strategy to restore the
sustainability of the PAYG pension systems, which has not been introduced to the
Czech pension system yet, according to the author’s knowledge. The ABM reside in
the calculation of the future course of three key variables, the contribution rate, the age
of retirement and the indexation of pensions while ensuring financial sustainability and
the liquidity of the pension system for all years of the study. As the results show,
without applying the ABM rules, the Czech pension system does not seem to be
sustainable in the period of 25 years.

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