A man in the Czech Republic has lost a legal battle over whether funds in his supplementary pension scheme were protected from creditors during an insolvency proceeding. The case, which reached the country’s highest court, centered on whether money contributed from a guaranteed minimum income – funds legally shielded from seizure – retained that protection when transferred into a pension plan.
The individual argued that because the savings originated from an amount legally exempt from creditors, they should remain untouchable. However, courts consistently ruled against him, determining that the guaranteed minimum income is intended to cover essential living expenses, not long-term savings accumulation.
The Supreme Court affirmed this position, stating that once the funds were deposited into the pension scheme, they lost their original character. The court likewise noted that the total amount wasn’t solely the man’s contribution, but included state and employer contributions as well.
“An execution proceeding can be carried out on a claim arising from supplementary pension savings, regardless of the fact that part of the claim may originate from amounts exempt from execution from the debtor’s wages,” the Supreme Court ruled.
‘The Unseizable Should Remain Unseizable,’ He Argued
The man then appealed to the Constitutional Court, arguing that the protected minimum income should always remain available to the debtor and doesn’t lose its status even if used for savings or left untouched. However, the Constitutional Court sided with the lower courts.
The Constitutional Court, led by Judge Tomáš Langášek, rejected the man’s appeal, stating that the purpose of the protected minimum income is not to facilitate savings. If funds are saved, the court reasoned, execution is permissible from a constitutional perspective. This decision was recently published in the court’s database.
“It cannot be ignored that the complainant was able to deposit part of the guaranteed minimum income into pension savings throughout the period when he still had enforceable obligations to his creditors, which he was primarily obliged to repay,” explained Judge Langášek.
