The Constitutional Court found no 45 / 2025 Coll.
The Constitutional Court found sp. zn. Pl. ÚS 18 / 24 in the case of the application for annulment of § 13 paragraph 1 (a) of Act No. 427 / 2011 Coll., on supplementary pension savings, as amended by Act No. 462 / 2023 Coll., and § 29 of Act No. 42 / 1994 Coll., on supplementary pension insurance with a State contribution and on amendments to certain laws related to its implementation, as amended by Act No. 462 / 2023 Coll.
Valid
45
FIND
The Constitutional Court
of 22 January 2025
sp. zn. Pl. ÚS 18 / 24 concerning the application for annulment of § 13 paragraph 1 (a) of Act No. 427 / 2011 Coll., on supplementary pension savings, as amended by Act No. 462 / 2023 Coll., and § 29 of Act No. 42 / 1994 Coll., on supplementary pension insurance with a State contribution and on amendments to certain laws related to its implementation, as amended by Act No. 462 / 2023 Coll.
On behalf of the Republic
The Constitutional Court decided under sp. zn. Pl. ÚS 18 / 24 on 22 January 2025 in plenary composed of the President of the Court of Josef Baxy and judges and judges of Lucie Dolanská Bányai, Josef Fiala, Milan Hulmák, Jaromír Jirsy, Veronica Christian, Zdenek Kühn (Judge of the Rapporteur), Tomáš Langášek, Jiří Nábán, Katřina Ronovský, Dita Řepková, Pavel Šámal, Jana Wintra and Daniela Zeman on the proposal of the Group of 71 Members, for which she is acting on the annulment of Paragraph 13 (a) of Act No. 427 / 2011 Sb, on the supplementary pension, as amended by Act No 462 / 2023 Sb.
as follows:
Motion denied.
Reasons
Subject matter of the procedure and text of the legal provisions contested
1. In this finding, the Constitutional Court deals with the constitutionality of the new legislation on the state contribution to supplementary pension insurance and supplementary pension savings. In particular, it is an adjustment which withdrew the State contribution from 1 July 2024 to those who were granted an old-age pension.
2. The contested provisions were introduced into the legal order by Act No. 462 / 2023 Coll., amending certain laws in connection with the development of the financial market and the promotion of old age reinsurance.
3. The first of the contested provisions concerns the state contribution provided by the Ministry of Finance from the State Budget for supplementary pension savings (Section 12 of Act No. 427 / 2011 Coll., on supplementary pension savings). According to Article 13 (1) (a) of the same Act, only a member of a supplementary pension scheme who has not been granted an old-age pension pension is entitled to the State contribution. Article 13 of the Act, including its contested part (highlighted by the Constitutional Court), reads as follows:
Entitlement to the State contribution
(1) A Participant shall be entitled to a State contribution,
(a) which has not been awarded a retirement pension; and
(b) which has:
1. permanent residence in the Czech Republic; or
2. residence in the territory of a Member State and is subject to pension insurance under the legislation of the Czech Republic or is subject to public health insurance in the Czech Republic.
(2) In order to demonstrate compliance with the conditions laid down in paragraph 1, the participant shall communicate to the pension companies the birth number allocated by the competent authority of the Czech Republic, if the birth number has not been assigned to it, the number of the insured person kept in the register of insured persons under the Act governing insurance premiums for general health insurance.
(3) The participant shall notify the pension companies in writing without undue delay of any changes in the facts referred to in paragraphs 1 and 2.
4. The second of the contested provisions concerns the provision of supplementary pension insurance. It is proposed to abolish the entire Article 29 of Act No. 42 / 1994 Coll., on supplementary pension insurance with a state contribution and on amendments to certain laws related to its implementation, as amended:
The provision of a State contribution to the benefit of the supplementary pension insurance participant shall be governed by the law governing supplementary pension savings.
Arguments of the appellant
5. The applicant, a group of 71 Members, requests that the Constitutional Court, in proceedings under Article 87 (1) (a) of the Constitution of the Czech Republic, annul the above provisions of § 13 (1) (a) of Act No. 427 / 2011 Coll. and § 29 of Act No. 42 / 1994 Coll.
6. The appellant generally stresses that the contested provisions deprive an old-age pensioner of the State contribution to supplementary pension savings and supplementary pension insurance. The withdrawal of the State contribution concerns not only new contracts concluded but also all existing contracts. At the same time, the law prevents many people from leaving the system and allows others to do so, but under considerable sanctions. According to the appellant, the contested provisions therefore infringe a number of constitutionally guaranteed rights.
7. In a more detailed argument, the appellant raises several headings of objections. It first analyses the nature of supplementary pension savings and supplementary pension insurance as two parts of the so-called third pension pillar. It is about financial products, specific and dedicated savings services. It is a system built on a contractual basis, these products are provided by non-state (private) entities, but with the support of the State and with a significant link to the system of physical protection in old age. Both parts of the third pillar are intended to contribute to increasing physical security in old age, particularly for people with lower incomes, and to motivate them to increase the amount imposed. The amount of State aid has always been linked to the amount of the contribution. Support for this financial product was also provided for the possibility of reducing the income tax base under certain conditions. The essence of both products lies in their long-term use on the basis of a long-term calculation of savings. State aid for both types of products played an important role in terms of their profitability, all the more so in view of the period of high inflation.
8. The appellant stresses that participation in supplementary pension savings or supplementary pension insurance has never been restricted by age or associated status. According to Article 1 (3) of Law No 427 / 2011 Coll. the rights and obligations arising from supplementary pension savings must not be contrary to the principles of equal treatment. According to Article 2a of Act No. 42 / 1994 Coll., the supplementary pension provision prohibits discrimination against participants on the basis of a demonstration set of reasons. Until now, the supplementary pension savings and supplementary pension schemes have been widely opened to all interested parties, including the granting of State aid.
9. However, Law No 462 / 2023 Coll. withdrew the State aid to the participants of these schemes if they were granted an old-age pension. A number of participants in supplementary pension savings or supplementary pension insurance after a substantial change in State aid is not able to terminate their participation. Others may then terminate their participation, but only under very poor conditions. The appellant points to the so-called divestiture institute. The participants of both products may, but without the State contributions granted to date, have paid out their deposited funds, for supplementary pension savings only after 24 months, for supplementary pension insurance after 12 months of regular savings (cf. § 25 paragraph 3 of Act No. 427 / 2011 Coll., or § 23 paragraph 3 of Act No. 42 / 1994 Coll.). The contested provisions prevent participants from leaving the existing product. On the contrary, participants who save longer but are not yet entitled to payment of benefits other than compensation must either require only the disposal or further save under less favourable conditions. Thus, the contested provisions effectively lock the participants in both products in disadvantaged contracts. The appellant also points out that the granting of State aid in fact outweighed a certain rigidity of supplementary pension savings and supplementary pension insurance.
10. The applicant considers that the change in the granting of State aid is an inadmissible retroactive intervention, since it removes the substance of a previously freely concluded contractual relationship back to the detriment of the savings participant. The appellant is aware of the finding of the Constitutional Court of 19 April 2011 sp. zn. Pl. ÚS 53 / 10 (N 75 / 61 SbNU 137; 119 / 2011 Coll.) on State aid for building savings, but the contested provisions have now been adopted by the legislator in a different legal and economic context. In addition to building savings, supplementary pension savings and supplementary pension insurance are already another product of the state-promoted financial product, which is devalued by unilateral changes. The appellant also draws attention to the institute of "disappointed trust 'in law, which was developed in the case law of the German Federal Constitutional Court, to which the Constitutional Court also applied, for example in the already mentioned finding of Pl. ÚS 53 / 10.
11. The appellant draws attention to the differences in the present case compared with the situation considered in the Pl. ÚS 53 / 10. No strong public interest can now be identified that outweighs the legal certainty and predictability of the content of the contractual relationship. The explanatory memorandum does not contain it. The intervention in the legitimate trust of participants in legal relations with the participation of the State, albeit indirectly, is significant and goes beyond the issue of supplementary pension insurance contracts and supplementary pension savings contracts. We need to focus on the imbalance of treaties, initially expressing free will, but distorted by the state's supreme intervention. In the present case, the constitutional right to material protection in old age under Article 30 of the Charter of Fundamental Rights and Freedoms ("the Charter ') has been affected.
12. The applicant adds that the Czech Republic is defined as a democratic rule of law in Article 1 (1) of the Constitution. The principles of the rule of law include the principle of legal certainty, clarity, predictability and certainty of law. It draws attention to the finding of 1.10.2019 sp. zn. If the Constitutional Court has recognised in this case that there are legitimate expectations of the parties to be protected, such expectations also exist for supplementary pension savings contracts and supplementary pension insurance contracts. The appellant also links the protection of legitimate expectations with the principle of pacta sunt servanda. As an example, the finding of 12 May 2011, sp. zn. I. ÚS 3571 / 10 (N 91 / 61 SbNU 415), in which the Constitutional Court established a direct link between the principle of pacta sunt servanda and the application of the fundamental right to legitimate expectations of the acquisition of assets by performance of the contract. The appellant adds that there is a accumulation of legitimate expectations for participants in supplementary pension savings contracts and supplementary pension schemes. One component consists of a long-term and traditionally respected state aid scheme granted to all participants, the other consisting of expectations arising from the general principle of ownership of all human companies known as "the rule of law ', i.e. the pacta sunt servanda principle. The third component consists of naturally emerging expectations based on the long-term nature of this particular product, in which contractual relations are to last for decades, and are therefore to be as stable as possible.
13. According to the appellant, this is also a discriminatory intervention. It creates a state of considerable inequality between the participants in the third pillar of pension insurance scheme and constitutes an infringement of the constitutional protection of equality in all rights, equal treatment and a general ban on libel. The contested provisions unduly restrict the right to property and use it freely pursuant to Article 11 of the Charter and also interfere with the fundamental right to physical protection in the old age referred to in Article 30 (1) of the Charter, which is also guaranteed in a particular minimum form by the International Labour Organisation Convention No 102 (published as a communication by the Federal Ministry of Foreign Affairs No 461 / 1991 Coll.), which is binding on the Czech Republic within the meaning of Article 1 (2) of the Constitution.
14. The appellant repeatedly contends that participants in supplementary pension savings and supplementary pension schemes are in the position of consumers whose protection is addressed, inter alia, in part of the Civil Code or in the Charter of Fundamental Rights of the European Union. Consumer protection is among the constitutionally protected values and attributes of the rule of law. For other types of contracts (e.g. bank account management), consumers are able to respond, for example, to a unilateral and collective change of contract terms. In the present case, however, this is an intervention not from a private person (entrepreneur), but from the state through a supremacy. The appellant stresses the importance of consumer protection as a weaker party, which is currently reflected, inter alia, in the regulation of consumer credit or the introduction of new out-of-court ways of resolving consumer disputes. The appellant also refers to the findings of the Constitutional Court on consumer status. At the finding of 7.2.2024 sp. zn. II. ÚS 1578 / 21 The Constitutional Court stressed the importance of protecting the weaker party or the importance of the pacta sunt servanda principle. With reference to the finding of 23.11.2017 sp. zn. I. ÚS 2063 / 17 (N 217 / 87 SbNU 493), it is also necessary to choose a more favourable interpretation for consumers in doubt.
Observation of the party and the intervener
15. The Constitutional Court called on the Chamber of Deputies and the Senate, acting on behalf of Parliament as a party to the proceedings, to comment on the application to initiate proceedings (Paragraph 69 (1) of Act No. 182 / 1993 Coll., on the Constitutional Court, as amended by Act No. 18 / 2000 Coll.).
16. Furthermore, the Constitutional Court called on the Government and the Ombudsman to state whether they were entering the proceedings (as interveners) and, where appropriate, to comment on the application (Paragraph 69 (2) and (3) of the Constitutional Court Act, as amended). Finally, the Constitutional Court also invited the Association of Pension Companies of the Czech Republic, p.
Observations of the Chamber of Deputies
17. The Chamber of Deputies, in its observations of 16 July 2024, stated that the Government's bill amending certain laws in connection with the development of the financial market and the promotion of old-age collateral was circulated to Members as Press No. 474 / 0 on 15 June 2023 in the ninth parliamentary term. The first reading of the bill took place on 29 August 2023 at the 73rd meeting of the Chamber of Deputies. The bill was ordered to be discussed by the Guarantee Budget Committee, which discussed it on 22.9.2023 and sent the resolution to Members as Press No. 474 / 1. The second reading of the draft law took place on 24 October 2023 and the amendments tabled were processed as print No 474 / 2. The Guarantee Committee discussed the bill after the second reading and its resolution was delivered to Members as House Press No. 474 / 3. The Chamber of Deputies approved the bill at third reading on 15.11.2023 (vote 61, resolution 818) and on 21.11.2023 the bill was delivered to the Senate. The Senate has not discussed the bill within the deadline. The draft Act 462 / 2023 Coll., which also adopted the contested provisions, was approved in a constitutional manner, the law was signed by the relevant constitutional authorities and duly declared.
Statement by the Senate
18. The Senate stated, in its observations of 9 July 2024, that the Chamber of Deputies passed the Senate on 21 November 2023. The Senate Organizing Committee ordered this proposal as Senate Press Number 189 in the 14th term to be discussed by the Committee on Economy, Agriculture and Transport and the Constitutional Law Committee. The Committee on Economic Affairs, Agriculture and Transport, as a guarantee committee, adopted at the 22nd meeting held on 13 December 2023 on the draft law of Resolution 155 recommending the Senate to approve the draft law as referred to by the Chamber of Deputies. On the same day, the draft law was discussed by the Constitutional Legal Committee, which, by its Resolution 129 adopted at the 22nd meeting, also recommended the Senate to approve it as referred to by the Chamber of Deputies. In a debate in the Senate, the senators spoke with different views. Senator Golán stressed that people who had already been granted an old-age pension but had not yet been paid remained entitled to a tax deduction of funds entered into supplementary pension savings or supplementary pension insurance. On the contrary, Senator Canov has proposed that this group of persons should remain entitled to old-age support and that he should also make an amendment to that end. After the debate, the Senate voted on the proposals submitted. Only 34 of the 72 senators and senators present in the Chamber of Deputies to approve the bill. Neither were any of the amendments accepted. Thus, the Senate has not adopted a resolution on the bill.
Government observations
19. The Government has entered the proceedings on the proposal. In its detailed observations of 11.7.2024, it stated that it did not agree with the proposal. According to the Government, the appellant fails to see that the legislation which forms part of the contested legislation is related to the implementation of the constitutionally guaranteed fundamental right enshrined in Article 30 (1) of the Charter. This is primarily an assessment of one of the rights enshrined in the title of the fourth Charter, but the control of constitutionality is limited in the area of social rights.
20. As regards the nature of supplementary pension savings and supplementary pension insurance, the Government stresses that the State is not a participant in the relations that arise in the provision of these financial products. However, the State may intervene in such relations, for example by adjusting State aid.
21. In relation to the objection to the principle of equality and the discriminatory nature of the contested provisions, the Government states that, according to the case law of the Constitutional Court, it is for the State to decide that it will confer less advantages on a group than others, but must prove that it is doing so in the public interest and for the public good. Not every unequal treatment of different entities can be classified as a violation of the constitutional principle of equality.
22. The Government refers to the so-called four-step test, used for example in the finding of 28 January 2014 sp. zn. 2. whether they are treated differently on the basis of one of the prohibited grounds; 3. Whether the different treatment of the complainant is liable by imposing a burden or by denying good; 4. whether the different treatment is justified by adequate monitoring of a legitimate objective. In the conduct of this test, the Government considers that the review will stop at the first step, since those with an old-age pension granted and those who have not yet received an old-age pension cannot be considered as comparable groups. Participants with an old-age pension are entitled to receive a pension benefit from the state budget in the form of an old-age pension, while participants who have not yet received an old-age pension do not have that option. In the case of the first group, the need for further saving for old age is significantly lower.
23. Even if the two groups could be considered comparable, the government believes that the treatment of the two groups will be different in the next steps of the test. The criterion for different treatment is the granting of an old-age pension, which does not constitute a prohibited reason. Where appropriate, the withdrawal of the State contribution from the beneficiaries of an old-age pension constitutes a denial of a certain good in respect of those participants, which is justified by the adequate monitoring of the legitimate objective. This legitimate objective is to set up State aid effectively or to use public funds at a time of high budget deficit and consolidation of public budgets.
24. The legislator has assessed that participants with a recognised retirement pension have a need to make additional old-age savings significantly lower because they can already receive an old-age pension. Additional pension savings and supplementary pension insurance with a State contribution are long-term products to be used to generate pre-retirement savings. Their aim is for people to receive through them the funds they will receive in addition to the retirement pension under the first pension pillar. They are not intended to serve as a medium-term investment product with State aid.
25. The Government also points out that the withdrawal of the State contribution from the beneficiaries of an old-age pension implies that, although they do not have the right to a State contribution, they can deduct the contribution from the income tax base in full, as opposed to other participants who can deduct it only in excess of the amount with which the highest State contribution is linked.
26. On the objections concerning the retroactivity and legitimate expectations of the parties, the Government argues that, in view of the assessment of the retroactive effects of the contested provisions, the retroactivity is an incorrect and not an inadmissible retroactivity. It refers to the finding of Pl. ÚS 53 / 10, according to which false retroactivity is generally permissible. The assessment of whether false retroactivity is exceptionally unacceptable lies in measuring the objective pursued by the legislator and the means it has chosen to achieve the objective, with the disappointed trust of citizens in the law, and in so doing, in the "load capacity" of such disappointment.
27. The Government reiterates that the general aim of the new legislation is primarily to set up state aid effectively in the third pension pillar in the neutral impact on the state budget. The objective of the transitional legislation, according to which the amended conditions for the granting of the State contribution apply also to contracts concluded before this amendment is effective, is to seek a uniform approach to supplementary pension savings and supplementary pension schemes with a State contribution, regardless of when their contract was concluded. Another objective of such a transitional regulation is to ensure that the changes introduced in the establishment of the State contribution take effect as soon as possible in practice.
28. According to the case law of the Constitutional Court, the legislature is entitled to carry out overarching interventions governing the conditions for the granting of the State contribution to supplementary pension insurance and supplementary pension savings and thus to determine its amount. The order to respect legitimate expectations does not give rise to a ban on amending legislation. The contested provisions provide for a change that is not an illogical excel of the legislator, but is proportionate to the purpose and initial intention of the legislator to effectively operate direct State aid to supplementary pension schemes and supplementary pension savings, in particular as an incentive element, in terms of stable public finances. Moreover, the State has repeatedly changed the conditions for entitlement to State aid to the parties. In addition to the above mentioned finding of Pl ÚS 53 / 10, the Government refers to the findings of 15.5.2012 sp. zn. Pl. ÚS 17 / 11 (N 102 / 65 SbNU 367; 220 / 2012 Coll.) or of 13.1.2015 sp. zn. II. ÚS 2216 / 14 (N 3 / 76 SbNU 63). Nor is the legislature's decision on the way to resolve the time conflict of old and new legislation, from a constitutional point of view, a matter of chance or of pleasure, but a result of considering a conflict of values. The method of legislative intertemporal solution reflects the social urgency of protecting the public interest. State aid is not a key element of supplementary pension insurance or supplementary pension savings - in terms of the overall profitability of the product, the importance of valuing the invested funds with an extension of the investment horizon is increasing due to the so-called compound remuneration, while the importance of the state contribution is declining.
29. Moreover, legal expectations could not arise for a group of persons concerned by the contested changes because the contested regulation was the result of a long-term and publicly presented discussion as part of a comprehensive package of public budget consolidation measures. The amendment was published on 29 December 2023, the participants with an old-age pension granted but no state contribution to the newly contributed contributions is granted only from 1 July 2024. This effectively introduced a transitional period.
30. In addition to the appellant's further arguments, the Government states the following. The entitlement of a participant in supplementary pension savings or supplementary pension insurance to a State contribution is a claim against the State, not a claim from a contractual relationship between a pension company and a participant. The reference to the principle of pacta sunt servanda is therefore non-circulatory. The Government adds that the State contributions are attributed to the contribution made by the participant on a one-off basis after their contribution to the contribution made to the savings agreement. Therefore, if the State has credited a State contribution to a participant's contribution by 30 June 2024, on condition that the participant complies with the minimum five-year savings period, it is legitimate to insist that this condition be fulfilled even if the new contributions from the participant are no longer granted. The restriction of the participant in the form of a minimum length of savings period and the time needed to qualify for the claim is a long-term condition. Participants with a recognised retirement pension and taxable income shall not lose a tax advantage. And even other participants with a recognised retirement pension have no incentive to leave the system, their funds still being saved are still being valued.
31. As regards the appellant's argument by developing a consumer protection regulation, the Government states that this argument is circumstantial. The consumer right has a different function. The protection afforded to the participants of the third pension pillar cannot be confused with the right to maintain a particular financial product in its current form or even with the right to maintain State aid for these products. The level of State aid may vary over time and depending on other factors.
Communication from the Ombudsman
32. The Ombudsman informed by letter of 1 July 2024 that he would not intervene in the present proceedings.
Replication of the appellant
33. The appellant submitted a detailed reply to the Government's observations. It agrees with the Government's argument about the nature of social rights and their enforceability. In the proposal, it did not object to an adjustment of the amount of the State contribution or to a change in the conditions for its allocation. In essence, the appellant's constitutional argument is a criticism of the provisions that have intervened in existing contracts by once having withdrawn the entitlement granted to a group of insured persons, while at the same time preventing part of them from leaving the supplementary pension savings system or supplementary pension insurance. Arguments thus aim at violating property rights, which certainly is not social law.
34. The appellant rejects the Government's claim that "the State does not participate in the relations that arise in the provision of these financial products." Indeed, the State is de facto an indirect participant in all supplementary pension savings contracts or supplementary pension insurance contracts. The key question, however, is how and how the State can intervene in existing contractual relations in which it is effectively very much involved without violating the fundamental principles of the rule of law. The appellant reiterates that the State's intervention was not only that the selected group of contract participants had withdrawn the possibility of obtaining a State contribution, but at the same time some of them prevented the possibility of a contractual relationship being freely terminated and abandoned without any legitimate reason.
35. The appellant maintains that considerations concerning the legal protection of consumers are also relevant, which are important not only in the application of the law but also in its creation. The standard of consumer protection as a weaker party is currently at a much higher level than was the case at the time Pl. ÚS 53 / 10 was adopted. This should also be taken into account in the creation of a right, the essence of which should not, in principle, be directed against the trend of strengthening consumer protection.
36. The author insists that this is unconstitutional discrimination. The government's quoted findings are over 30 years old, from a time when, among other things, there was no legislation prohibiting discrimination, as we know it now, nor was there legislation protecting consumers on current standards. However, in the present case, it was not the case that a group was granted less benefits. The appellant reiterates that the essence of the unconstitutional nature of the contested provisions lies in the accumulation of restrictions affecting the affected group of pension pension insurance participants. As a result of the contested provisions, many parties to the contracts are now forced to remain in the system on an absurd basis only to leave it.
Expression of the Association of Pension Companies of the Czech Republic
37. The Constitutional Court also requested comments from the Association of Pension Companies of the Czech Republic, which brings together nine pension companies operating in the private capital savings market in the Czech Republic. In particular, it asked the association for data quantifying the effects of the contested amendment on the third pillar system, in particular with regard to the outflow of pension-age persons from the scheme, the performance of individual funds in the scheme in 2023 and 2024, possibly also by an opinion on the proposal. The association's comments were then sent to the parties.
38. The Association pointed out in its observations of 4 December 2024 that it would not comment on the constitutionality of the contested regulation. She stated briefly that the law is effective in the current version since 1.1.2024, the clients of pension companies included it in their expectations and adapted to it. If the Constitutional Court now abolishes this legislation, it could disrupt the already impaired confidence in the system and bring about a number of unbreakable problems both for pension companies and for the clients themselves. However, from the perspective of the association, the best solution would be to postpone the legislature's withdrawal by five years in order to allow all clients to save at least a minimum period under the conditions prior to the legislative amendment.
39. At the time of the adoption of the Act, there were more than 230 000 clients in the savings scheme with an entitlement to an old-age pension who had not been saved for at least 5 years on 1 July 2024 and could not leave the system without losing all the state contributions. Of this there were about 80,000 clients who had been in the system for less than 24 months and therefore could not leave the system without losing all the funds entered.
40. The association stated the following for the profitability of the funds. The rate of return on pension supplementary insurance (according to the older legislation), managed in transformed funds, was on average 2.24% per year for all pension companies in 2023, and will not be known for 2024 until mid-2025. Additional pension savings are distributed in various participating funds according to the client preference. In 2023 the evaluation in this system varied from 9,04% (mandatory conservative funds) to 14,84% (balanced strategies) to 20,64% (dynamic strategies). For the first three quarters of 2024, the evaluation was 3,82%, 7,55% and 12,10% in the same participating funds. Of course, profitability is determined by market developments and may vary over time. In the case of long-term participants with a higher savings, the share of the State contribution in the yield is negligible, yet the participants perceive it very positively.
41. During the year 2023, when the then medialised legislative process leading to the disputed amendment took place, there was a significant increase in the withdrawal of clients from the system in all ages. In the 55-year-old age category, he left the system in 2023 in the form of one-off compensation of twice his clients compared to 2022. During the first seven months of 2023 303 333 clients (of which 170 762 clients over 60 years) and in 2024 in the same period 390 781 clients (of which 199 240 clients over 60 years) stepped out of the system in any way.
42. On the question of the Constitutional Court about alternatives to which people with an old-age pension can invest their funds, the association has been rather restrained. It is not a homogeneous group, each in a different life, working and personal situation, with a different tolerance to investment risk and with a different investment horizon. The advantage of investing in supplementary pension schemes or supplementary pension savings is its relative simplicity and clarity of the product, while at the same time strict regulation and low cost. Not all citizens have the knowledge, time and desire to look for other investment alternatives in the financial markets.
Proceedings before the Constitutional Court and its procedural assumptions
43. The procedural assumptions of the proceedings are fulfilled: the appellant, i.e. the group of 71 Members, has an active legitimacy [Paragraph 64 (1) (b) of the Constitutional Court Act] and the Constitutional Court is competent to discuss the proposal [Article 87 (1) (a) of the Constitution].
44. In order to clarify the case, it is not necessary to order oral proceedings in view of the content of the objections (Sections 44 and 48 (1) of the Constitutional Court Act, as amended).
Review of the procedure for the adoption of the contested legal provisions
45. If the procedure for approving Act No. 462 / 2023 Coll., which introduced the contested provisions into the two laws, the Constitutional Court came mainly from observations submitted by the Chamber of Deputies and the Senate, as well as from publicly available electronic sources (stenograms from meetings of the two chambers of the Parliament of the Czech Republic, resolutions and parliamentary and Senate press, freely available on the website of both parliamentary chambers).
46. Act No. 462 / 2023 Coll. was issued within the limits of the Constitution established competence and adopted in a constitutional manner. After all, the appellant did not dispute the constitutionality of the adoption and publication of this law.
Review of the contested legal provisions
Pension system in the Czech Republic
47. The constitutional basis of the State's obligation to ensure an effective pension system is Article 30 (1) of the Charter. According to him, citizens have the right to adequate physical security in old age. The details of this law are laid down by law (Article 30 (3) of the Charter).
48. The pension system is currently built on two pillars. The first pension pillar is classical pension insurance, the legal basis of which is Act No. 155 / 1995 Coll., on Pension Insurance, as amended. The second, now abolished pillar was the pension savings that existed from 2013 to 2017 (Act No. 426 / 2011 Coll., on Pension Savings, as amended, repealed by Act No. 376 / 2015 Coll., on the Termination of Pension Savings).
49. The third pension pillar is governed by two laws: Act No. 42 / 1994 Coll., on supplementary pension insurance with a State contribution and on amendments to certain laws related to its implementation, as amended, and Act No. 427 / 2011 Coll., on supplementary pension savings, as amended. Since 2013, the second Act has transformed supplementary pension insurance into supplementary pension savings, although the legal relationships arising from supplementary pension insurance contracts concluded under the former Act have remained in the future.
50. The State supports the functioning of both third pillar schemes by paying the State contribution. Entitlement to the benefit of the participant shall be granted at monthly intervals. In order to give a participant such a claim, two conditions must be met (Section 14 (1) of Act No. 427 / 2011 Coll.). On the one hand, the participant must comply with the conditions laid down in Paragraph 13 (1) and, on the other hand, must pay at least a minimum contribution within the period referred to in Paragraph 9 (2). If the participant has fulfilled these conditions in the calendar month, the participant shall have a State contribution. The amendment implemented by Act No 462 / 2023 Coll. did not in any way affect the provisions on entitlement to the State contribution; only increased the minimum contribution (from 300 CZK to 500 CZK). Similar arrangements were also made in Act No. 42 / 1994 Coll. (in § 29 of Act No. 42 / 1994 Coll., as effective until 31.12.2023), but since 2024 this Act only briefly states that the provision of a State contribution to the benefit of the supplementary pension insurance participant is governed by the Act governing supplementary pension savings (see the contested § 29 of Act No. 42 / 1994 Coll., as effective since 1.1.2024).
51. If an old-age pension was granted to a participant, there was no role to be played by the end of 2023 in granting the State contribution. It is precisely this change of concept that is at the heart of the author's criticism.
52. As a result of the contested legislation, only the beneficiary of the supplementary pension scheme who has not been awarded an old-age pension pension (see Article 13 (1) (a) of Act No. 427 / 2011 Coll.) is entitled to the State contribution; the same condition applies to the entitlement to the State contribution of the supplementary pension scheme (see Article 29 of Act No. 42 / 1994 Coll.).
53. Act No. 462 / 2023 Coll., which brought the two contested provisions into the legal order, was adopted according to the petitioner with the aim of "in particular introducing certain measures to contribute to the development of the capital market in the Czech Republic." The sub-measure consisted of an increase in the minimum contribution of the participant in pension funds to which the State contribution relates, as well as an increase in the maximum amount of that contribution, above which the State contribution is no longer increased. This took into account the general wage growth since the last setting in 2013, and the participants should have been motivated to make higher contributions. In particular, in relation to the contested measures, the explanatory memorandum explains that "supplementary pension savings (i.e. supplementary pension insurance) are not intended to serve as a short-term or medium-term product with the support of the State, but as a means of delaying consumption in the long term for the purpose of paying pension-age funds to mitigate any fall in financial income that may be linked to retirement '. This was the reason why the State contribution would not be received by the persons to whom an old-age pension was granted (explanatory report on the government bill amending certain laws in the context of the development of the financial market and the promotion of old-age insurance, House Press No. 474 / 0, Parliament of the Czech Republic, Chamber of Deputies, 9th Election, p. 39 and 40 *).
54. The substance of the problem to which the contested provisions were to be faced is explained in detail by the RIA Final Report, which is annexed to the explanatory memorandum. The previous state contribution legislation in the third pension pillar did not take into account in any way whether the participant was receiving an old-age pension. Therefore, in the supplementary pension schemes and supplementary pension savings, a significant number of pension-age participants will also be saved (the Ministry of Finance, which prepared the RIA report, had no data on which of the participants had been awarded an old-age pension, thus working at an age of 65 as an analogy to the retirement age in which the old-age pension is received. At the end of 2021, 97,6% of people aged 65 and over received an old-age pension, but only 42,9% of people aged 60 to 64).
55. The number of participants aged 65 and over in 2022 was almost 808 000 people, which was 19.5% of all participants in the third pension pillar with a registered contribution. Some 60% of these participants have saved more than 60 months, so they could terminate their contract at any time without losing their entitlement to the State contribution (RIA p. 40).
56. In addition, according to the legislation, until the end of 2023, the condition for the participant's entitlement to one-off settlement (when State contributions were also paid to the participant) was, on the one hand, to reach the age of 60 years and, on the other hand, to a savings period of at least 60 calendar months (Section 20 (3) of Act No. 427 / 2011 Coll.). Although the amendment implemented by Act No. 462 / 2023 Coll. doubled the length of the required savings period from 60 to 120 calendar months, these new conditions do not apply to contracts concluded before the date of entry into force of the amendment (see Article XIII (2) of Act No. 462 / 2023 Coll.). For contracts concluded by the end of 2023, the original savings period required shall therefore be at least 60 calendar months.
57. Participants in the third pension pillar at the age of 65 and more years were characterised before the adoption of the contested amendment by imposing monthly above-average contributions. In the third quarter of 2022, almost 71% of these participants saved a monthly amount equal to or greater than CZK 1,000. The average amount of the monthly government contribution paid to participants aged 65 +, which between 2016 and 2021 significantly exceeded both the supplementary pension scheme and the supplementary pension savings scheme, the average amount of the monthly state contribution for the younger age categories of participants. The average monthly national contribution of a participant aged 65 + in the third quarter of 2022 was about 128% of the total average contribution (a gradual decrease of around 136% in 2016) in pension savings and almost 124% of the total average contribution (a gradual increase of around 120% in 2016) in supplementary pension savings (p. 40 and 41 of the RIA Final Report).
58. Act No. 462 / 2023 Coll. came into effect on 1 January 2024, and at this time the contested provisions became effective. Article XIII of Act No. 462 / 2023 Coll. (Transitional provisions) according to which contributions to supplementary pension savings and supplementary pension insurance paid up to the end of the first calendar quarter following the date on which this Act takes effect shall be subject to the conditions for entitlement to a State contribution under Sections 13 and 14 of the Supplementary Pension Savings Act, as effective before the date of entry into force of this Act. As stated again in the explanatory memorandum concerning "the conditions for an old-age pension, the State contribution will no longer be granted to those participants who will have an amendment (or at any time thereafter) in effect at the beginning of the second calendar quarter (or at any time thereafter) granted an old-age pension '(cited explanatory note, p. 84). The State contribution is therefore not granted under the new conditions from 1.7.2024.
59. In the subsequent interpretation, the Constitutional Court will first analyse the objection of the retroactive withdrawal of the State contribution (VI. B. below) and then the objection of the breach of the principle of equal treatment (VI. C. below), only briefly to comment on the arguments remaining (consumer protection and breach of the pacta sunt servanda principle, see VI. D. below).
On the objection of retroactive withdrawal
(a) In general, on the constitutional principle of the prohibition of retroactivity and to resolve the conflict of validity of old and new legislation
60. The question of retroactivity in the law of the Constitutional Court has been analysed many times [cf., for example, the finding of 17.1.2024 sp. zn. Pl. ÚS 30 / 23 (36 / 2024 Coll.), the reduction of extraordinary indexation of pensions, paragraphs 131 to 138]. That is why it is now sufficient to sum up the general bases briefly.
61. The definition of the rule of law includes the principle of legal certainty and the protection of citizens' trust in law, which includes the prohibition of genuine retroactivity (i.e. retroactive) of legal standards. True retroactivity occurs typically in a situation where a later law cancels, modifies or disagrees with legal effects based on legal facts that have become fully effective at the time of the older law, or combines the rights and obligations of entities with such facts that have become fully effective at the time of the earlier law, but which at that time were not legal in nature (cf. Pl. ÚS 30 / 23, paragraph 133, including references to professional literature, and paragraph 136 with reference to German case law).
62. By contrast, so-called false retroactivity is generally permissible. It typically occurs in situations where a new law changes or cancels existing legal relations in the future. It is essentially not about the retroactive application of the law, but about the modification of lasting legal relations that have been created in the past with effects on the future. However, legal claims arising under the old legislation do not fall within the scope of this intertemporal model. Thus, false retroactivity is no retroactivity (retroactivity of the rule of law). Therefore, some legal regulations prefer the word "immediate effect of the new legislation on existing legal relations" (cf. Petrlík, D. Retroactivity of legislation in Community law, taking into account Czech, German and French law. Praha: Linde, 2005, p. 12.; cf. also Melzer, F. K intertemporal law in general. In: Melzer, F. - Tegl, P. et al. Civil Code. Big comment. Volume III. § 419- 654. Prague: Leges, 2014, p. 1097-1194, and that is why part of the case-law of the Constitutional Court uses the term "retrospective '[e.g. the findings of 14.2.2024 sp. zn. Pl. ÚS 42 / 23 (72 / 2024 Sb.), Jenštejn, paragraph 43; of 18.5.2021 sp. zn. Pl. ÚS 87 / 20 (N 97 / 106 SbNU 84; 232 / 2021 Sb.), the tax package for 2020, paragraphs 117, 121, 134 and 135; of 4.2.2020 sp. zn. Pl. ÚS 15 / 19 (N 18 / 98 SbNU 128; 54 / 2020 Sb.), to the limitation and end of the liability for excess, part VI.A.].
63. The constitutional limit of this type of intertemporal nature is a legitimate expectation in the continued applicability of old law and the associated protection of acquired rights and trust in law. The assessment of whether false retroactivity is exceptionally unacceptable lies in measuring the objective pursued by the legislator and the means it has chosen to achieve the objective, on the one hand, with the disappointed confidence of citizens in the continued applicability of the 'old' law, on the other. The Constitutional Court examines the "endurance" of such disappointment, taking into account the intensity of public interest that the legislator has led to a change in legislation and the degree of disappointment in trust in law. It has meaning as to what right it is and how strong it creates expectations. The specific position here has legitimate expectations in the form of an asset claim (Pl. ÚS 30 / 23, paragraphs 134, 136 and 138). The earlier case-law pointed out that the degree of difference between the new and the old legislation and the social urgency of the introduction of the new legislation was of great importance in the assessment of the method of legislative solution for intercurrent [the finding of 4.2. 1997 sp. zn.
64. On this issue, one of the biggest legal philosophers of the 20th century, Lon Fuller, rightly states that "all laws, not only tax, enter human calculations and decisions. A person can choose to study to get a certain job, marry, restrict or expand his family, dispose of his property - all with regard to the existing legal order, which is not just tax laws, but also property and contract laws... If every time he relies on existing law to procure his affairs, a person should be protected against any change in legal rules, our whole legal order would grow" (Fuller, L. Morale of Law. Praha: Oikoymenh, 1998, p. 60).
65. This idea is also reflected in the case law of the European Court of Human Rights (ECHR). According to it, the contracting States have wide discretion in the field of social security. It is up to them to establish a social security system and how they set it. The Contracting States also have a free hand on what kind of contribution they will make and to what extent they will provide under such a system. However, the rights guaranteed by the social security scheme are worthy of legal protection (the decision of the Grand Chamber of the ECHR of 6.7.2005, Stec and others against the United Kingdom, together with complaints No 65731 / 01 and 65900 / 01, § 54). However, this does not mean that the contracting States must not change the system in place at a later date, whether the conditions for granting or the amount of the pension, benefit or social security contribution. Changes in social security legislation may be necessary in the light of social developments and emerging insights into the need to support a particular group of persons, possibly also the development of individual situations (judgment of the Grand Chamber of the ECHR of 13 December 2016, Bélané Nagy v Hungary No 53080 / 13, § 88).
(b) Application of general considerations to the present case
(i) In the present case, this is called false retroactivity (retrospective)
66. The new legal standards entered into force on 1 January 2024, from 1 July 2024, the State contribution is not granted to those participants who received an old-age pension on that date (see paragraph 58 above). It is common ground that the contested provisions have only changed the content of existing legal relations between supplementary pension savings participants or supplementary pension insurance participants, on the one hand, and the State, on the other. The content of legal relations is regularly (at monthly intervals) paid state contribution (Section 14 of Act No. 427 / 2011 Coll., more on that point 50 above).
67. The contested provisions did not in any way affect the already incurred (i.e. every month arising) claims to pay the State contribution before 2024. The contested provisions have therefore triggered the effects of the so-called false retroactivity.
(ii) It's not a hit on property law.
68. The contested provisions did not interfere in any way with the ownership of the participants in the third pension pillar. As stated in the preceding section, it has not in any way touched on the past claims for State aid (in relation to these claims already incurred, the constitutional protection of property rights is undeniably valid), but it has only prevented the emergence of new claims for the future, six months after the date of application of the new legislation (cf. the conclusions of the ECHR judgment of 14 February 2008 Glaser v Czech Republic No 55179 / 00, § 51 and 52, according to which the constitutional protection of property law applies only to existing assets; the future law can therefore be considered as "property 'only if it has already been acquired or is the subject of a claim which is specific).
69. The legislation now under consideration is fundamentally different from the one dealt with by the Constitutional Court in its finding on the taxation of church restitutions, which the appellant points out. In fact, the legislature has formally decided on taxation but has effectively reduced the financial compensation to the full amount of which the Church and Religious Companies have acquired legal entitlement and legitimate expectations at the time of the conclusion of the settlement agreements [finding of 1.10.2019 sp. zn. In the present case, however, the participants have not been entitled under the old legislation to pay any (certain) amount paid in instalments (as is the case with church restitutions). They have been granted a recurring monthly entitlement to the aid if the participant fulfilled the conditions laid down by law in the period in question (more on top of which point 50 above).
(iii) Incorrect retroactivity here is constitutionally permissible
70. Furthermore, the Constitutional Court had to deal with the constitutionality of the solution chosen by the legislator for this matter. While false retroactivity (retrospective) is fundamentally acceptable, it cannot be ruled out that, exceptionally, in view of the principle of legal certainty and the protection of trust in the right, the individual's interest in the continued duration of the old legislation for the "old 'legal relations of the legislator expressed by the public interest in amending it is outweighed.
71. The Constitutional Court must assess whether the parties that entered into the supplementary pension savings agreement, or the supplementary pension insurance agreement before 1 January 2024, are of no constitutional interest in maintaining the existing legal arrangements, which, in the course of the peer review, would outweigh the public interest in the change of legislation for the existing participants [cf. Other considerations of the finding to which the Government refers and which is disputed by the appellant, i.e. the finding of 19 April 2011 sp. zn. ÚS 53 / 10 (N 75 / 61 SbNU 137; 119 / 2011 Sb.), the construction investments - retroactive reductions and taxation of State aid, paragraphs 157 to the above.]
72. In general, the Constitutional Court notes that the determination of a contribution from the State budget for a specific purpose and for a particular group of persons depends on the extent to which the legislator finds its effectiveness or public interest in its provision. Although these contributions are a benefit of the legislator, their provision is linked to the fulfilment of the social right to adequate physical security in old age (Article 30 (1) of the Charter).
73. In the present case, this is a connection with social law, but the legislator has a number of solutions to meet (Articles 30 (3) and 41 (1) of the Charter). For this reason alone, the expectation of the continued existence of legislation on existing legal relations cannot be as strong as it would be for classical fundamental rights.
74. At the same time, it is important to draw attention to the long-term public debates and criticisms that were the subject of the previous legislation and the payment of the state contribution to those entitled to an old-age pension. For example, the Office of the National Budget Council considered this adjustment to be one of the problematic points which illustrated the inoperability of the third pension pillar system. In fact, a substantial part of the total State contribution paid (about 26%) was received by persons over 65 years of age, which should, however, be used for pension benefits from the third pillar scheme. On the contrary, younger age categories were insufficiently involved in the system, plus their savings and their articles were low (Office of the National Budget Council. Fees of Czech pension companies in relation to their investment strategy, January 2023, p. 6; see p. 47 of the RIA Final Report, the text related to footnote 20).
75. The Third Pension Pillar system, as it stood before 1 January 2024, enabled participants to withdraw saved savings after the payment of a contribution of at least 5 years and at the same time reaching the age of 60 years (Section 20 (3) of Act No. 427 / 2011 Coll., as amended by 31.12.2023). Thus, participants over the age of 60 were able to set up a new pension savings agreement after the collection of the funds they had saved up so far, and at the same time to withdraw the newly saved funds, including state contributions and interest, after 5 years (the condition of age as opposed to younger participants), thereby using supplementary pension savings as an alternative to other medium-term investment products that do not have State support. However, this was the case with the function of the third pension pillar as a long-term investment product (cf. p. 41 of the RIA Final Report).
76. The contested legal regulation responded to this criticism. This was the result of a few years' ongoing public debate aimed at strengthening the function of the third pension pillar as a system of long-term pension saving, not retirement savings. Thus, the participants of the third pension pillar could not legitimately rely on the legislator not to reassess the support for those entitled to an old-age pension in the future.
77. Nor can the associated responsibility of the government and Parliament for the legal regulation of decent old-age security be overlooked. The funds saved thanks to the adoption of the new adjustment will remain in the third pension pillar system, but will serve the real objective that this scheme is intended to fulfil, thus serving as a long-term means of deferring consumption for the purpose of payment at retirement age (i.e. they will be used to increase State aid to participants before the grant of an old-age pension). The savings are used to give greater incentive to save in the long term for those participants who have not yet been entitled to a pension (cf. the explanatory note cited in paragraph 53 above and the RIA Final Report, p. 44).
(iv) The author of the criticised "lockdown" is not forced to remain in a system that lacks economic meaning without a state contribution
78. The appellant further criticises that the participants who have lost State aid are "locked" in the system and cannot withdraw from "inconvenient" contractual relations. Therefore, the Constitutional Court must consider whether this aspect is not a reason to conclude that the so-called false retroactivity is (exceptionally) constitutionally inadmissible. In addition, it can be argued that this problem did not arise as a result of the provisions currently contested or was not founded as a result of the adoption of amendment by Act No 462 / 2023 Coll. It is a (public) regulation of supplementary pension savings contracts and, respectively, supplementary pension insurance contracts and the establishment of a legal relationship between pension savings participants or supplementary insurance, on the one hand, and insurance companies, on the other hand (Sections 19 and 20 of Act No. 427 / 2011 Coll.).
79. Nor is it true that the legislator ignored this problem. The explanatory memorandum presented to the Chamber of Deputies in June 2023 states that in the 3rd quarter of 2022, the number of participants aged 65 and over was almost 808 000 (19.5% of all participants in the third pension pillar with registered contribution). Of these, 60% had saved more than 60 months and could thus terminate the contract without losing their entitlement to the State contribution (RIA Final Report, p. 40, more points 54 above).
80. It is logical that the number of participants in legal relationships based on older contracts, which have saved at least 60 months, during the last quarter of 2022, during 2023 and up to mid-2024 (when State aid to participants with a recognised retirement pension ended) has further increased substantially. This is also the case with the data submitted by the Association of Pension Companies. According to her statement, the number of persons leaving the third pillar system in retirement age during 2023 was significantly increased, apparently in response to the moderated parliamentary debate on current regulations. However, leaving the system has increased in all age categories, which was probably caused by uncertainty about further legal regulation of the third pillar. At the same time, around 80 000 clients with newly concluded contracts who were entitled to an old-age pension on July 2024 (cf. more points 39 and 41 above) were added to the scheme.
81. In reality, the abolition of State aid on persons with an old-age pension was such that they either had a right to one-off compensation on 1 July 2024 (which, in the light of the above, was the case for the large majority of participants), or they had that right not long after 1 July 2024. According to the Communication of the Association of Pension Companies (see paragraph 39 above), 230 000 participants in the third pillar of the pension age were therefore in the scheme of less than 24 months and were able to leave the scheme only with the loss of all the funds invested [after 24 months the system could be withdrawn from the contractual relationship with the insurance company as well as from the right of disposal, but without State contributions - see Section 8 (e) in conjunction with Section 25 of Act No 427 / 2011 Coll.].
82. It is essential for the constitutionality of this situation that the length of the savings period as a condition for the creation of the right to one-off compensation (including the payment of State contributions provided) continues to be governed by the legislation applicable to older contracts until the end of 2023, so five-year participation is sufficient (more on this point, paragraph 56 above).
83. Another important factor is the assessment of economic relevance to remain in the system after 1 July 2024 without the participant continuing to receive state contributions. The information provided by the Association of Pension Companies (more than paragraph 40 above) shows that, without the State contribution, the economically disputed participation in the supplementary pension scheme under the earlier legislation is valid until the end of 2012. However, these investments now managed in the transformed funds cannot be affected by the author's criticism. After 2013, new contracts can no longer be concluded in this old system, so its participants were able to withdraw from the system at any time after June 2024 and thus obtain the state contributions provided (the condition of the duration of the additional insurance period was logically granted).
84. On the contrary, the performance of supplementary pension savings is significantly more interesting from an investment point of view (e.g. between 9,04% and 20,64% of the annual return in 2024, the data provided for the first three quarters show a theoretical outlook for the annual assessment from 5,1% to 16,1%). While the Constitutional Court is aware of the variability in revenues (the values stated here are certainly not a guarantee that this will be the case in the future), it is possible to agree with the association's argument that investment in supplementary pension savings is competitive with other more conservative products (for example, at the end of 2024, the maximum market interest available on the savings account was 4.2% * *, inflation for 2024 was 2.4%). In addition, it is necessary to reiterate both the government's and the Association of Pension Companies' argument that State aid is not a key element of the performance of the third pillar's products: in terms of the overall profitability of the product, the importance of the appreciation of the funds invested with an extended investment horizon is increasing due to the so-called compound remuneration, while the importance of the State contribution is decreasing (similarly, the associations, cf. the conclusion of paragraph 40 above).
85. The author of the criticised "lockout" in the third pillar is therefore not staying in a system that lacks economic sense without a state contribution.
86. The Constitutional Court concludes that, in the present case, so-called false retroactivity is a constitutionally consistent solution.
The objection to an infringement of equal treatment
87. The applicant further submits that the contested regulation infringes the constitutional prohibition of discrimination and is contrary to the requirement of equal treatment. The government opposes the fact that the status of persons with an entitlement to an old-age pension cannot be compared to that of persons without such entitlement in the third pension scheme. Thus, according to the Government, there is no comparability of the comparable groups at all, which is a fundamental conceptual sign of discrimination.
88. First of all, the Constitutional Court must reject the appellant's argument that perhaps the earlier case law of the Constitutional Court is inapplicable or out of date. It's the opposite. The Constitutional Court is based on the case law of the Czechoslovak Constitutional Court of 1992 (namely the finding of the Constitutional Court of the CSFR of 8.10.1992 sp. zn. Pl. ÚS 22 / 92). All case-law is based on the uniform concept of the constitutional principle of equality and non-discrimination, on whose philosophical basis nothing has changed since 1993 [cf. the recent finding of 20.11.2024 sp. zn. Pl. ÚS 16 / 24 (6 / 2025 Coll.), the pay discrimination of starting judges on maternity and parental leave, paragraph 68 below].
89. Before the application of the constitutional prohibition of discrimination itself, it should be stressed that, according to settled case-law, only in relation between at least two entities in the same or comparable position can be considered in the equality category. The key step in applying the principle of equality is therefore to determine whether the two situations with which the law treats them differently are indeed comparable, i.e. whether they are relevant. The assessment of comparability, and thus the finding of the criterion of relevance, necessarily includes a value judgement which assumes an understanding of the meaning and purpose of the legislation under review [finding of 20 November 2007 sp. zl. ÚS 50 / 06 (N 196 / 47 CollNU 557; 18 / 2008 Coll.), the budgetary determination of taxes - inequality between small municipalities and large cities, paragraphs 19 and 20].
90. The current legal regulation favours the concept of the third pension pillar as a pension saving rather than a pension saving, which is also reflected in the right to a State contribution. The grant of an old-age pension is the basic criterion with which all pension schemes work. Therefore, taking into account the constitutional principle of non-discrimination, the situation of persons who have not yet been granted an old-age pension and those who have already been granted a pension is not comparable in the third pillar system. Therefore, it is not possible to talk about the different regulation of comparable situations, but about the different treatment of unequal situations. Therefore, the constitutional prohibition of discrimination could not be violated for that reason alone.
The argument for consumer protection and infringement of the pacta sunt servanda principle
91. In short, the Constitutional Court will comment on the appellant's remaining arguments. The argument of the principle of consumer protection is missing with the current issue. The consumer protection rules do not affect situations where the State makes contributions to the third pillar scheme. The parties to this system have no consumer status in relation to the State (and the State does not have the status of an entrepreneur offering any services or goods in this relationship, cf., for example, the judgment of the Court of Justice of the European Union of 4 October 2018, Kamenova, C-105 / 17, paragraph 35). The caselaw relied on by the appellant does not affect the present case at all [which results only from a mere insight into these findings, namely from the finding of 7.2.2024 sp. zn. II. ÚS 1578 / 21, paragraphs 37 to 41 and 23.11.2017 sp. zn. I. ÚS 2063 / 17 (N 217 / 87 SbNU 493), paragraphs 15 to 15].
92. To argue the principle of pacta sunt servanda (contracts are to be followed), it can be noted that entitlement to the State contribution is not given under a contract between a pension company and a participant (the less between the State and the participant) but under a law. The Constitutional Court has already expressed its views on the possibility of withdrawing this right in the future (part VI B.).
Conclusion
93. The Constitutional Court summarises that the legislature has withdrawn State aid with effects on the future and has not in any way touched on past claims for State aid. The solution in the form of this so-called false retroactivity does not create unconstitutionality. The distinction (for the purposes of entitlement to State aid in the so-called third pension pillar) between persons who have been granted an old-age pension and others is not a breach of the constitutional principle of equality.
94. The Constitutional Court therefore rejected the application for annulment of the contested provisions as unfounded pursuant to Paragraph 70 (2) of the Law on the Constitutional Court.
President of the Constitutional Court:
JUDr.
* Available at https: / / www.psp.cz / sqw / text / origin2.sqw? idd = 228464
* * Comparison of interest rates available at https: / / www.e15.cz / sporaci-ucty-comp.
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Regulation Information
| Citation | The Constitutional Court found no 45 / 2025 Coll., sp. zn. |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 26.02.2025 |
|---|---|
| Effective from | - |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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