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Polish ministries deny report of second-pillar asset nationalisation

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Poland’s Ministry of Family, Labour & Social Policy (MRPiPS) and the finance ministry have issued a joint statement denying earlier press reports that the MRPiPS had recommended a nationalisation of Polish second-pillar (OFE) assets.

According to a widely circulated report by the Polish Press Agency (PAP) yesterday, MRPiPS, as part of the current consultation three-yearly review of the country’s pension system, had recommended that the OFE assets be transferred in full to the Demographic Reserve Fund and recorded in individual members’ sub-accounts at the state Social Insurance Institution ZUS.

The assets, according to PAP, would continue to be invested on the stock exchange “in the interest of the financial market”, with returns credited to workers’ sub-accounts.

The proposal is a different beast to the plan unveiled in July by finance and development minister Mateusz Morawiecki.

While Morawiecki’s plan envisaged three-quarters of the OFE assets moving to privately managed third-pillar accounts, the MRPiPS reportedly opted for a full-scale nationalisation, along the lines of an earlier rumoured scheme.

Today’s joint statement stressed that Morawiecki’s plan, developed jointly by the two ministries and the Polish Development Fund, had been positively received by the market, and that subsequent work by the MRPiPS was consistent with the original scheme.

The statement arrested the slump on the Warsaw Stock Exchange that followed the PAP report, a fall related to the high level of equities held by OFEs.

According to data from Polish Financial Supervision Authority (KNF) to the end of October, 75.3% of the PLN147bn (€34bn) of net assets were invested in Polish regulated market shares, and a further 6.9% in foreign stocks.

Furthermore, the Warsaw Stock Exchange includes a sizeable number of dual-listed stocks: 53 on both the main and parallel market, out of a total 487.

In terms of market capitalisation, foreign companies account for 48%.

Neither the Polish nor the foreign private companies welcome the prospect of the state becoming a major shareholder, in some cases ending up with majority voting rights.

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