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Prime minister sacks Polish pensions supervisor

POLAND - The vice-chairman of the Polish Financial Supervision Authority (KNF) with responsibility for pensions, Iwona Duda, has been dismissed by the new Polish prime minister, Donald Tusk.

Her sacking was at the request of KNF head Stanislaw Kluza, according to a report in Polish newspaper Rzeczpospolita.

Duda was appointed by the previous government and had proved to be a controversial choice.

It is understood Kluza had made a similar request several times but they had been ignored by Tusk's predecessor, Jaroslaw Kaczynski. Duda was affiliated with Kaczynski's Law and Justice (PiS) party. Kaczynski was defeated in October's general election.

Pension funds have consistently complained about the performance of the KNF during Duda's period in office, citing an overly-bureaucratic approach.

"They are always eager to launch a control, not an audit but a full-blown control, but when it came to support and advice the bureaucracy is prohibitive," the manager of one pension vehicle told IPE. "You must write a paper, wait three months and if they answer you at all it will probably be unclear because nobody wants to take responsibility. It should not be like this."

Appeals also went unheard from market players keen to see the 5% of a portfolio ceiling on investments abroad raised.

In addition, foreign assets - included equities - have to be rated, and the costs associated with such investments have to be borne by the pension fund management company, not the fund.

"In effect, this means that it just is not worth investing abroad," said another pension fund manager. "The 5% restriction means there is not real diversification effect and the cost issue raises a possible conflict of interest."

The supervisor had also been associated with a imposing a block on the merger of open pension funds. In the last couple of years several consolidation attempts have been blocked on the grounds of maintaining competition.

Market players have argued the approach lacked finesse, with the supervisor having apparently decided there should be 15 players and they should be the current players.

However, it is noted earlier this year this position appeared to have relaxed slightly when Dutch insurer Aegon was given approval to acquire PTE Ergo Hestia. The firm has been renamed Aegon PTE, and is in the process of acquiring PTE Skarbiec-Emerytura, the subject of an earlier takeover initiative. The expectation is the two will be merged after the acquisition is completed.

Officials at the supervisor office were unavailable for comment at the time of publication.

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