The second pillar is the part of the pension system where people save their own money for retirement. Its importance is growing mainly because the population is aging and state pensions are increasingly burdened.
The planned changes from 2029 are supposed to bring a simpler and more flexible way of paying out savings, so that savers can better adapt their pension to their needs.
With effect from January 1, 2029, the payment phase is changed according to Act no. 310/2024 Coll. After applying for a pension, the saver will be able to withdraw half of the saved amount in the form of program withdrawal. This amount will be paid for a certain period of time, which depends on the average life expectancy of people of that age. The money will be paid out by the pension management company.
Change of payout phase
From January 1, 2029 the method of paying the pension from II is changing. pillar according to Act no. 310/2024 Coll. This change will affect people who apply for a pension only after this date.
After retirement, the saver will be able to withdraw half of the saved amount gradually. The money will be paid to him for a certain period of time, which depends on the average life expectancy at his age. This part will be paid by the pension management company (DSS).
The other half of the savings will be earmarked for a lifetime pension. This ensures that the saver has an income for the rest of their life and does not spend all the money too soon. This new system combines greater freedom in withdrawing money with the security of a regular income in old age.
There is also the option of withdrawing money more flexibly, i.e. setting the payout according to your own needs. However, this option will only be available to those who already have sufficient income for life (for example, from a state pension or other sources). Their total pension must be higher than the so-called reference amount, which is approximately the average old-age pension.
It is also important that if someone applies for a pension before December 31, 2028, they will be covered by the old system. The new rules therefore only apply to new pensioners from 2029.
Current status until 2029
Currently, people in II. pillars they save part of the pension contributions to their own account, from which they will be paid a pension later.
This money is invested in pension funds managed by pension management companies. As a result, a person has a pension in old age from two sources, namely from the Social Insurance Company and from his own savings.
II. the pillar has two main phases. In the first, savings phase, the saver gradually creates savings and can choose where his money will be invested. In the second, payment phase, these savings will begin to be paid out in the form of a pension. The amount of the pension depends mainly on how much a person has saved and how his money has been valued.
At present, the saver has quite a lot of freedom. He can choose between a lifetime pension, a temporary pension or a program withdrawal. When choosing a program, you can set the amount and duration of the payout. However, this option is conditional on having sufficient income from other pensions (above the reference amount).
Pensions from II. pillars are not taxed and there is also protection of savings in the form of a guarantee. The pension is applied for through Social Insurance or DSS, while the saver receives offers and chooses the one that suits him best.
