Polish president Bronisław Komorowski has said he intends to examine the government’s bill overhauling the country’s second-pillar pension system.
Komorowski told the Polish tabloid Super Express he must see whether the bill is in line with the Constitution, and what the implications are for future retirees.
The bill, published on 1 October, is in a 30-day consultation period.
The president, who signs off laws and whose prerogatives include returning bills to Parliament and referring them to the Constitutional Tribunal, is acting early in the legislative process.
Meanwhile, the Labour and Social Policy Ministry and the Finance Ministry are already having second, if somewhat different, thoughts on the second-pillar pension fund (OFE) investment policies, as they can no longer buy Polish or other sovereign or state guaranteed bonds.
A 75% minimum equity limit is to come into effect on 4 February 2014.
On 1 July, the funds will no longer have to meet a minimum investment return.
Instead, their performances will be measured against a benchmark weighted at 90% WIG – the Warsaw Stock Exchange’s index – and 10% three-month Wibor (Warsaw Interbank Offered Rate). According to the pensions industry, the equity limit would turn the funds into high-risk investment vehicles, while the new benchmark has been widely viewed as aggressive and difficult to replicate.
On 14 October, deputy finance minister Wojciech Kowalczyk told the Polish Press Agency (PAP) that, in response to market opinion, the 75% minimum equity limit and new benchmark would last for only two years, not in perpetuity as stated in the draft bill.
The following day, labour and social policy minister Władysław Kosiniak-Kamysz questioned on Polish radio whether, in the interests of future returns, the funds should be subjected to any limits at all.
Kosiniak-Kamysz has also acknowledged that many Poles fail to understand that their pension fundamentally depends on the level of contributions accumulated over their working life. His ministry intends to propose that an understanding of pensions is introduced into the school curriculum.
While Kosiniak-Kamysz’s statements offer a welcomed lifeline to the pensions industry, he has no backing thus far from finance minister Jacek Rostowski.
Speaking in Luxembourg at an EU finance ministers’ meeting, Rostowski replied that keeping the 75% limit and liberalising OFE investment policies after two years remained the “best solution”.
The Polish Financial Supervision Authority (KNF), whose job would include publishing the new comparative benchmark, has joined the bill’s long list of critics.
KNF vice-chairman Lesław Gajek told Polish television on 16 October that the proposals were so badly constructed and against the interests of fund members that they would eventually lead to the liquidation of the second pillar.