POLAND - Donald Tusk, Poland's prime minister, has demanded that second-pillar pension funds in his country cut costs and ensure higher pension benefits.

In a speech following a meeting with representatives of the 13 Polish pension funds, Tusk claimed the funds paid too much attention to their profits and too little attention to pension pay-outs.

"The safe functioning of pension funds has to translate more than ever into a sense of financial security and customer satisfaction," he said.

His main criticism focused on fees - cut from 7% to 3.5% as at January 2010, but still too high in his estimation.

Tusk also wants pension funds to reduce their financial efforts to draw members from other funds - another point

already being put into legislation

.

The money should instead be used for information and education of members, he said.

He then set a deadline for pension funds and the government to come up with reform proposals by mid-September, as he wants new regulations to come into effect with the new year.

The government's intention was not simply to "turn the system upside down", Tusk said, but to make it more effective and better able to provide pension payments, as currently pension companies "do not deliver results consistent with expectations of future retirees and beneficiaries of the scheme".

The prime minister did not explicitly mention the ongoing debate on withdrawing money from the second pillar, but he noted there was "a proposal to build a new system."
 

Topics