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Sunday 25 August 2019

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Poland to liquidate mandatory pensions in reform

Written by Sunniva Kolostyak
17/04/2019

Poland will restructure its pensions in a reform to fit a three-pillar system, Prime Minister Mateusz Morawiecki said at a press conference.

According to the Polish Press Agency, the PM said Poland’s main problem was “the lack of ability to create savings, savings for later years of life, savings for infrastructural projects, Poles’ savings that benefit the entire economy”.

“We want to tidy up the pension system which is a key part of the financial security of Poles for their retirement years,” Morawiecki said.

The system aims to be based on three pillars – the Social Insurance Institution (SUZ), the Employee Capital Plans (PPK) and Personal Pension Accounts. That means, however that Open Pension Funds, or OFEs, will be liquidated.

Savings in OFEs, which are personal pension savings managed by investment fund managers, will be transferred to IKE accounts, the agency reported.

The reform will, according to the PM, affect 15.8 million Poles. OFEs hold around PLN 162bn (€37.8bn), which would be charged with a 15 per cent fee unless future pensioners decide to move their pension pot to ZUS, the Polish Press Agency said.

This, the PM noted, is required to “maintain justice”, as the state’s ZUS pension payments are taxed and the IKE payouts are not.



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