POLAND - The Polish ministry of labour and social policy has submitted two bills to the government for approval, to establish a payout system for Polish private sector pensions.

The two bills have gone to the cabinet for approval but are written to allow the programmed withdrawal and annuities from funded pensions, as well as establish the creation of annuity providers.

The move follows the ministry's earlier rejection of a joint life product proposal.

But if these latest bills are approved by the government and cleared by parliament, legislation will lead to the introduction a programmed withdrawal product and a single life annuity product for those over 65.

Payments will be made by the existing mandatory pension funds, but the government's intention is to see separate private sector annuity companies emerge.

The ministry is also preparing legislation to allow the pension asset management companies (PTEs) managing the open pension funds to offer multi funds, as they are currently prohibited from offering funds with different risk profiles.

The first payments are due to be made next year, though so far no legislation for the payments' infrastructure and method has been put into place.

In a different move, the Polish government is planning to place a number of pension funds of state-owned companies in the Demographic Reserve Fund.

The government is due to privatise 740 companies, and 40% of the funds from privatisation would be put in the reserve fund.

"A project is currently being prepared for an amendment in the matter," the government has said in a news statement.

More information about the development of Poland's post-retirement income market will be available in the next edition of IPE Magazine.

If you have any comments you would like to add to this or any other story, contact Carolyn Bandel on +44 (0)20 7261 4622 or email carolyn.bandel@ipe.com