Making Money?
A serious change in the Polish retirement system is here to stay. Most of our pension contributions will stay in the Social Insurance Institution (ZUS) because the Ministry of Finance wants part of the contributions, which have so far been transferred to the Open Retirement Funds (OFE), to remain in special accounts in the ZUS. As much as PLN 13 billion annually is at stake here. The Ministry of Finance admits that the main aim of this move is to reduce the public deficit. How it will work? Currently, our pension contributions go to the Social Insurance Fund and from there part of the money is transferred to the Open Retirement Funds. Nevertheless, the Polish government wants to change it so that only 40% of the hitherto contributions are passed to the OFE and the remaining 60% of the PLN 22.5 billion of the annual contributions that has so far been remitted to the OFE would stay in the Social Insurance Institution in special accounts. This is the part that the Open Retirement Funds are currently obliged to invest in safe treasury bonds.
Why does the government wish to introduce this change? If this PLN 13 billion remains in the ZUS, the State Treasury will not have to issue bonds for this amount. This sum is equal to 1% of the GDP, whilst Poland has to reduce the public deficit to a level below 3% of the GDP by the end of 2012. Should pensioners worry about this change? Mr Rostowski, the Minister of Finance, reassures everyone that they do not have to be concerned. What is more, he claims that leaving the money in the ZUS will bring more profit because at present the OFE charge commission on this part of the contribution. “The Open Retirement Funds collect premiums for this money as if it was not a 100% safe investment, but rather a risky market decision. It would be better if this money stay in the pockets of future pensioners,” says Mr Rostowski. According to the Ministry of Finance, profits can amount to as much as PLN 500 million annually and, what is more, the interest rate of the special account in the ZUS will be equal to one of the bonds. Representatives of the Open Retirement Funds have a different opinion and they are worried that if the government takes the money away from them, this may result in a change in the investment strategy into a more aggressive one, which in turn may lead to diminution in future pensions.
Dziennik
