While working with this essay, I will touch on the major themes of the social security and insurance programs that Czech Republic has developed over the past. This will include areas of Social Security and Expenditures giving the historical perspectives in addition to the social security payments system that in Chile’s cases was originally pay as you go. The paper will also direct its spotlight on the distribution of income among the paper of varying ages especially the elderly and how the Social Security Taxes are structured to reflect this distribution of the age groups. The social security is structured in a way that it serves beyond just a retirement benefit. As majority of the people may think that social security is just a retirement benefit since most of the beneficiaries of the system are often retirees who receive the retirement benefits.
The fact has gone beyond that class of thought of beneficiaries being just the government employees as some people who receive and are entitled to the pension benefit plan in Czech Republic include those with disabilities of some sort, the spouses and children of a social security beneficiary as well as the spouses or a child of a worker who passed on in addition to the dependant of the government worker who was on the pension plan before passing away. In fact, researches have shown that based on the varying circumstances, individuals in Czech Republic may be eligible to the social security at any age level. In most cases, the social security program pays more of the benefits to the children of the beneficiaries than most of the established retirement benefits programs in Czech Republic (Bebchuk & Fred, 2004).
Czech Republic introduced the new social security system in the early 1880s and it allowed for privately managed individual accounts that replaced the long serving pay as you go accounts that were made public. However, over this period of time, Czech Republic has improved and made enormous changes in the capitalization of the system thereby liberalizing the institution and increasing the pension funds that are offered by the pension management fund companies. However, despite the good insights towards the reforms in the country’s system, other issues still remain unsettled key among them including large group workers who in most cases are not covered in addition to the irregular worker participation rates that has often led to inadequate retirement benefits to the individual beneficiaries. Historically, the system was implemented to include mandatory individual retirement plan that allowed workers to choose between the public Pay as You Go and the privately managed options (Schein, 2009).This allowed individuals to join the capitalization reforms and set up their own individual accounts of their personal choice. The result of this action has been the reduction of the public schemes that has continued to decline and is projected to even fully phase out by the end of 2050.
Debt acquisition and Retirement
Social security system was originally introduced in the Czech Republic in the early 1920s that originally was considered as pay as you go (PAYGO) pensionable system. The pensionable amounts and funds involved in the system was however, low in most cases by early 1970s and funding only trickled down to as low as only 73% of the Chilean workers in the entire economy. This was associated with the fact that majority and almost all the workers contributed only very minimum or what is referred to as in Czech Republic as a statutory minimum contribution with the majority of the Czechoslovakia population evading the pension contributions. The poor payment records associated with the pension systems was primarily associated with the mere fact that the contributions by the individuals had very little connection with the anticipated benefits that the individuals in the pension plan would reap (Schuler & Jackson, 2007). This therefore made people not find the need to be involved in such systems as it was expensive and the rewards were dire therefore reducing the people’s interests into the system hence the evasion of the pension scheme.
Acquisition and final Disposition of Assets
In order to ensure running and proper investments, the Czech republic uses the foundational investment knowledge by applying the better investment strategies and prioritizing on my investment strategies in the popular investment fields that will help construct a 20 year investment portfolio that are in alignment with my future goals. By prioritizing on the plans to save and pay the available debts and determine the monthly surplus. In more than five years after retirement, individuals will be using the investment as a tool to steer the projects and will be able to track my investments.
Emergency Cash funds
In lifestyle considerations citizens would love to live a form of sedentary lifestyle where physical activities to help me develop my internal organs such as bones that will involve personal training to ensure improvement of their strogen level and thereby improving the bone protection levels. In order to protect the lung and heart diseases, one will ensure they do away with the smoking thereby helping purify my blood level and circulation. They also maintain a regular diet and avoid any dietary requirements that are not appellant to my health. This kind of lifestyle therefore demands some form of saving to take care of emergency needs.
Lifestyle Considerations
Based on the growing needs and demands on our day to day life expectations and demands, it is necessary to have a well created and working comprehensive financial plan that is based upon one’s current financial needs. The social security plan that I have developed includes but not limited to the life expectancy planning, survivorship needs, lifestyle considerations, final disposition of assets and contingency allowances. The plan is based on my current and future needs, debt acquisition and retirement plans, acquisition and disposal of personal assets, emergency cash funds, investment plans, retirement plan and plan on the estate ownership.
Estate plan
The government of Czech Republic spends money that is generated from the payroll taxes paid in by the workers and their families as well as the employees or employers in different levels. This includes the taxes paid in by the families from retirees and their immediate families in addition to the disabled workers and their families. These taxes generated form a major part of the country’s sources of social security expenditures that are used as a social security benefit. Therefore the government uses the tax rates to compensate for the workers’ top 35 years of pay and for millions of the people who depend on the social security benefits for income (UDL, 2011). According to World Development Index report of 2012, Czech Republic has a dependency ratio of about 32 percent. This means that the percentage of the children that depends on the working population in Czech Republic is slightly higher thereby the need for a better social security schemes. Age dependency ratio, implying the young ones who depend on the older employed individuals, is the ratio of the younger dependants often the people who are younger than 15 years of age and the working age population, that implies the gap between those below fifteen years and those between fifteen and sixty five years of age. The demographic changes in Czech Republic have been defined by the changes from low population growth with high level of mortality and fertility that includes the dynamics of the low population with low levels of mortality and fertility rates. The country is characterized by high rates of population growth that is influenced by the initial decline in the mortality rate and the reduction in the rates of fertility (WDI 2012).
Survivorship needs
Benefits sometimes can also be either paid by the company or the employee as such like the vacation pay or payments for the holiday may be paid by the company. However others such as the medical insurance compensations are often paid in by the individual employees. It is wise to understand that compensations in many countries are shaped by the law of that land. For instance, compensations in the United States are shaped by the tax policies that have been so long based on the tax and compensation history. In case of the health insurance in Czech Republic, the compensation is a typical common benefit received by the employee as the does not exists a national sponsored national health insurance in the United States as such individuals seems to pay for their premiums that are deductable in their personal income taxes (Taylor, 2007).
Retirement Plan
Czech Republic’s pension plan is considered one of the most creative pension plans in the for the last quarter century ago. The system is exposed to vigorous scrutiny to ensure the individuals benefit from the system. The system applied in the Czechoslovakia government has been used in the United States as well as they U.S have also repeated this style of the Social Security reform applied in this country. Their enacted of national contributed pension program since the 1980s after the collapse of the formerly government run programs has enhanced effectiveness of the program as every individual is required to set aside 10 percent of their earnings into a private savings account, a reform that has since then seen the majority of the European and Latin American countries adopt the system as it provides 10 percent real return rate since the plan was initiated. The system has since then been considered one of the popular system and is considered to continue in the future. The Czechoslovakia system requires 20 years of payment to enable one receive a minimum pension benefit and the individual may stop paying towards the pension plan after they hit the minimum. The minimum benefit provides approximately average national income of about over six thousand per year.
Czech Republic has made reforms on its employment related social insurance program in 2001. The country has established a multi-tier unemployment insurance program for new job innings. Insurance workers are covered by an individual severance account that is supplemented by the Czechoslovakia authorities (Weinstein & Johnson, 1999). The reforms have been enacted several times since the previous years.
Life expectancy planning
In addition, the paper will clarify on the issues of retirement benefits as well as family relations to the beneficiaries such relations as spouse benefits, children’s benefits, and the benefits that are entitled to the widow or widower. The paper will also consider the unemployment benefits in Czech Republic, in addition to the healthcare coverage for the social security recipients before finally concluding with the Social Security Reforms in case the country has been involved in any of the reforms in the recent past apart from the earlier made reforms when the process was initiated.
A good Social Security system should however, reach and touch the lives of every individual in the country to be considered successful. It should not only be designed to help older Chechen but all the workers who became completely disabled in the line of duty while serving the nation in addition to the families where the pensionable spouse or either of the parent passes on. A good social security system should understand and implement the meaning of social security to the people and the family’s future financial resources as the social security system follows the basic logic of pay as you go in the case of Czech Republic where individuals work and pay taxes into their social security plan. This tax money is used to pay people who are already retired or people with disability and the survivors of the workers/beneficiaries of the system who may have died as well as the dependants of the beneficiaries.
Employee compensation in most cases refers to the cash benefits that individuals receive as an exchange of the services rendered to their employer. In most cases, at least in many countries, individuals earn a certain wage or salary due to the work they do to their employers. For example, in the United States, almost over 90% of the employees or what is considered the working population earns a salary of some form of wage. The compensation that is in form of cash often comprises the wages or the salary and in some cases may include the bonuses as well as the commissions and other benefits that may be based on the company such as the health insurance benefits, disability insurance and retirement benefits among others. As I mentioned, compensation depends on the company of the organization the individual works for as such it may be fixed or variable depending on the employer. Payments such as bonuses and commissions are examples of the variable payments (Davis, 2008).
Contingency allowances
The Czech Republic experienced Social Security reforms during the period of the communists’ social policy by reorganizing the government and increasing the benefits to enable the populace to be able to buy social peace and avoid the social constraints. They introduced divide and specify strategy that enabled the transformation to take place and give room for the fall of communism and allow for the legitimization of the politics and expansion of various social ideas. According to Bebchuk & Fred (2004) the reform enabled the expansion of living conditions by providing various state subsidies to the former state employees and adults of different challenges as well as the spouses of these beneficiaries of the social scheme. Likewise, in order to raise the funds to budget for the social benefits schemes, the government made possible reforms that enabled reeducation of government expenditures and subsidizing economy thus making it easy for the people to have decent living standards.
In conclusion therefore, it is evident that based on the growing needs and demands on our day to day life expectations and demands, it is necessary to have a well created and working comprehensive financial plan and benefits that is based upon one’s current financial needs. The plan created or developed includes but not limited to the life expectancy planning, survivorship needs, lifestyle considerations, final disposition of assets and contingency allowances. The plan should be based on current and future needs, debt acquisition and retirement plans, acquisition and disposal of personal assets, emergency cash funds, investment plans, retirement plan and my plan on the estate ownership. Likewise, for the pensionable funds to be properly used, beneficiaries need to use the foundational investment knowledge by applying the better investment strategies and prioritizing on their investment strategies in the popular investment fields that will help construct a 20 year investment portfolio that are in alignment with my future goals. By prioritizing on the plans to save and pay the available debts and determine the monthly surplus. In more than five years after the employees retirement, they need to use their invested funds as a tool to steer the projects and will be able to track the investments that would help them move forward in life after retirement to help them fully use their pension benefits
References.
Lucian Bebchuk & Jesse Fred (2004), Pay Without Performance, the unfulfilled Promises of Executive Compensation. Harvard University Press.
Michael L. Davis, (2008) Executive Compensation: The professional’s Guide to current issues and practices.
National Occupational Employment and Wage Estimates 2011.
Schein, E. (2009). The Corporate Culture Survival Guide. Chicago: John Wiley & Sons.
Schuler, R., & Jackson, S. (2007). Strategic Human Resource Management. New York: Blackwell.
Taylor, D. (2007, May 29). Competency frameworks, Learning and Development and the CIPD [People and Performance, Learning and Measurement, Human Capital and Talent Management].
United States Department of Labor, 2010.
Weinstein, A., & Johnson, W. (1999). Designing and Delivering Superior Customer Value: Concepts, Cases, and Applications. Miami, FL: CRC Press.
World Development Indicators 2012.
