Czech government moves on pension reforms and civil service cuts

The Babiš administration is advancing a series of pension reforms. The retirement age, currently set to rise to 67, is slated to return to 65 in a future amendment expected in the second quarter of next year, with the change to take effect from January 2028. A July‑approved amendment removed the promised increase in regular pension indexation and introduced extra monthly increments for seniors over 80, rising every five years, as well as a 1.5 % boost for working seniors for each additional year of employment. Early‑retirement options for selected high‑risk professions are under discussion, and pension‑savings contracts concluded before the end of 2023 may be terminated without penalty.

In parallel, the government began a systematic reduction of civil‑service positions on 1 July. The Ministry of Transport cut 51 jobs, projected to save over CZK 15 million; the Ministry of Industry and Trade eliminated 22 posts, saving roughly CZK 17.5 million; and the Ministry of Finance removed nine positions, saving about CZK 7 million. Conversely, the Ministry of Justice created 22 new posts to accommodate transferred agendas. Prime Minister Andrej Babiš framed the cuts as necessary to curb the budget deficit while maintaining funding for hospitals, the army, and infrastructure projects.