The strongest generation in the country, born in the 1970s, will begin retiring in 2034, which will have a major impact on public finances and society as a whole. According to the economic model, the shift in the retirement threshold would not happen suddenly, but rather gradually by three months each year until 2057. This measure is part of a broader reform package designed to mitigate future pressure on public finances and the pension system.

Without timely changes, the analysis projects that pension expenditures will rise to 10.4 percent of GDP by 2070, resulting in 63 seniors for every 100 working individuals. If the entire proposed ten-point reform package is fully implemented, the share of pension expenses would drop to 9.4 percent of GDP, and the ratio of seniors to economically active people would decrease to 29 per 100.

According to the institute, the debate should not focus solely on birth rates, as population aging will also affect healthcare, social services, and the labor market. Alongside the age limit shift, the institute proposes several other measures:

• Returning from the current nine-year to an eight-year primary school system.
• Expanding preschool education and increasing university flexibility.
• Allowing grandparents to take parental leave.

Ivana Tykač, founder of the Solvo Institute, emphasized that the future labor market will need to rely on greater flexibility. Older individuals might not work a standard five-day week but can remain active by passing on their experience to younger generations.

Chief Economist of Trinity Bank, Lukáš Kovanda, noted that while extending the economic activity of the population is a logical step, raising the age limit alone will not ensure long-term stability. He suggested combining it with other tools, including greater participation of older workers, flexible employment arrangements, private retirement savings, retraining programs, and a well-designed migration policy.

Furthermore, a recent survey among citizens confirmed that offering higher financial support alone does not lead to a significant increase in birth rates. Instead, decisions regarding parenthood are largely dictated by concerns related to housing availability and future financial certainty.

Source: e15
Prepared by the team of foreign office CzechTrade South Korea (Seoul)