WARSAW, Poland – Poland's lawmakers narrowly approved on Friday a hotly debated reform to the pension system that transfers some of the savings from private funds to the state.
Under the plan that is to take effect in February, private pension funds will have to transfer their government bond holdings — worth some 140 billion zlotys (33 billion euros), or about 55 percent of their assets — to a state-guaranteed account, called the ZUS. The funds are allowed to keep their stock holdings.
After a stormy debate, the lower house voted 232-216 in favor of the change Friday with one abstention.
Prime Minister Donald Tusk argues the money will be safer in the ZUS and less exposed to volatility in financial markets at a time when the nation is aging and pension payments gradually outweigh the input. The government critics say the plan is primarily designed to make the public accounts look better and violates private property laws. The move also raised questions among foreign investors about how reliable the government will be in respecting free markets.
"We are offering this plan out of responsibility for the current and future retirees, out of responsibility for the public finances (...) and for the financial market," said Labor Minister Wladyslaw Kosiniak-Kamysz.
Every Pole will have to decide next year whether to stick with only the state fund or have a private one, too. The decision concerns less than 3 percent of gross monthly earnings, but some Poles say they have not been informed exactly how the it will affect their pensions.
President Bronislaw Komorowski still needs to sign the plan into law.
The existing system, which supplements the ZUS with private funds, was introduced in 1999 and was supposed to guarantee pensions much higher than could be expected from the ZUS alone. The ZUS claims the pensions will be lower than forecast.