Participants of the Open Pension Fund will have two months to decide where to transfer their money - either to the Social Insurance Institute or to the Individual Retirement Pension Account (IKE). According to Business Centre Club expert Dorota Dula, it is too short a period for such an important decision.
Polish government on Tuesday adopted a plan to transform the Open Pension Fund (OFE) - it is to be launched on June 1, 2021. OFE participants will then have until August 2, 2021 to submit declarations regarding transferring their savings to the Social Insurance Institution (ZUS).
"Giving the OFE participants only two months to make their decisions, especially during summer holidays, without providing proper education that would help to make rational choices, raises concerns as to the lawmakers' intentions" - Ms Dula was quoted as saying.
Reverberations likely soon
Each OFE participant will have two options to choose between: transferring their funds to IKE (default option) or submitting a declaration to move all their savings to ZUS.
"Introducing such an important change involving 15 million Poles during the pandemic, without widespread public consultation (they ended in 2019), without serious, proper and fair debate on Polish pension system, does not help to rebuild the already shaken confidence in pension saving" - said Ms Dula.
"Reverberations of this move should be felt very soon, already after implementation of the Employee Capital Plans in the public finance sector has been completed" - the expert said.
15 million people in OFE
Press release after Tuesday's cabinet meeting reads that the proposed solution "ensures a real right to choose pension based on two pillars and guarantees private character of savings in IKE, which will be subject to succession"
According to the government, the changes will increase pension savings for Poles - through promulgation of IKE as well as through restoring confidence in the pension system. "The aim is to draw a clear distinction between a private, voluntary system, and a public, mandatory one".
The Government Centre for Information pointed out that OFE funds have been public, and in IKE they will be private. Furthermore, it was said that, at the time, there were 15,4 million participants in OFE, while the average account balance was 9,689 zloty.
According to the project adopted by the government, cashing funds saved in IKE will be possible after reaching retirement age and will be free from any taxation.
Źródło: TVN24 News in English, TVN24 Biznes
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