Statistical definitions of pension liabilities


I. Basic definition (Coverage – sector, area)

The SNA 2008 (System of national accounts) and ESA 2010 (European system of accounts) provide the basic methodological framework for pension liabilities for the EU Member States. These documents refer to the supplementary table of pension entitlements (Table 29), the obligation to compile the table is imposed by Eurostat's transmission programme.

Manual ESA 2010:

The methodology is elaborated in more detail in the publicationTechnical compilation guide for pension data in national accounts“, which can be found under this link:

The supplementary table of pension entitlements contains the total pension liabilities of the pension system of the Czech Republic. These include the pension liabilities arising from the voluntary third pillar of the state-funded supplementary pension scheme and the pension liabilities arising from the mandatory first pillar.

While the liabilities of the third pillar are recorded in the national accounts system at a given date and do not need to be forecasted, the pension liabilities of the first pillar need to be modelled.

The modelling of pension liabilities arising from the first pillar is based on the German Freiburg model. This is ADL model (accrued-to-date libility), its output is the present value of pensions to be paid in the future, or in other words the amount of household wealth saved that would be needed to meet the entitlements of current and future pensioners at a given date. The model determines pension liabilities from all types of pensions, i.e. old-age, disability, orphans' and survivors' pensions. The model is based on a number of economic and demographic assumptions that change over time, e.g. discount rate, pension indexation factor, age structure of the population. A homogeneous approach is applied for generations not yet retired. Their future pensions are calculated according to the current pensions paid and we expect them to have unchanged socio-economic behaviour (e.g. unemployment).

A detailed description of the methodology for modelling the first pillar pension liabilities is included in a publication on the CZSO website (see Section VIII for a link).

II. Data source

1.       Czech Social Security Administration, Ministry of Justice, Ministry of Interior, Ministry of Defence – data on the number of pensions paid and their average amount in each age cohort and by gender

2.       Czech Statistical Office – main macroeconomic indicators

3.       Government Regulation on the general assessment base – valorisation coefficient

4.       Population projection prepared by CZSO

III. Delineation of statistical population and sample, grossing up
and estimation of the non-treated part of the population (if relevant)

The model for estimating the pension entitlemests arising from the 1st pillar includes current pensioners (already retired) and future pensioners (people currently working and contributing to the scheme). The model does not include future pensions of people who are not yet working (not contributing to the scheme) or not yet born. Both residents and non-residents (i.e. pensioners entitled to a Czech pension living abroad) are included in the calculation.

IV. Overview of main published indicators

1.       Balance of pension liabilities at the date and at the beginning of the period

2.       Transactions and other flows in the period - other flows include revaluations (which occur due to changes in key model assumptions in the actuarial calculations such as the discount rate, wage rate and inflation rate) and other changes in volume (these arise, for example, from changes in demographic assumptions)

3.       The ratio of the value of total pension entitlements to GDP in a given year

4.       Sensitivity analysis - quantifying the effect of varying the discount rate by ±1% on the total value of pension entitlements and its ratio to GDP

V. Data revision policy - corrections, revisions, refinement procedure of estimations

If an error is detected in past calculations that had a significant impact on the resulting value of total pension entitlements, a correction is made and the corrected figures are published within the actual publication.

VI. Comparability

1.       Comparability over time

Because the model is based on a number of economic and demographic assumptions that change over time, the values of pension entitlements cannot be compared over time. However, Table 29 provides an analysis of the movement in the value of total pension entitlements within a year. Thus, it provides information on increase or decrease in the liability due to transactions, revaluations or changes in volume.

2.       Comparability with other outputs


3.       International comparability 

The publicationTechnical compilation guide for pension data in national accountsprovides, among other things, the same discount rate to be used by all countries concerned, which ensures international comparability of the model outputs.

Published national data on the EUROSTAT website:

VII. Seasonal Adjustment (if relevant)


VIII. Dissemination (description of the publication system, references to Eurostat outputs or national outputs may be provided)

According to the EU regulation, Member States are obliged to model pension liabilities with a three-year periodicity (so far 2015, 2018 and 2021), however, the Czech Republic has opted for voluntary annual modelling and publication of pension liabilities. The output comprising Table 29, a sensitivity analysis and a methodological description is published both on the Eurostat website (see link in VI., 3.) and on the CZSO website. In addition, the publication on CZSO website includes also a commentary on the published data.

Publications on the CZSO website -