Unfortunately, in 2016, the populist Law and Justice government decided to reverse the reform – the pseudo-economic rationale was the infamous lump of labor fallacy. They wrongly claimed that lowering the retirement age would be a perfect tool to fight youth unemployment – retiring seniors would (in their opinion) leave their jobs for young Poles.
The principle of free movement of capital, goods, people and services comprises the main pillar of the European Economic Area. Excessive regulation, however, prevents EU Member States from reaching its full potential. Such untapped potential is particularly evident in the free movement of financial services.
Ageing of the Polish society means that every year more and more people will reach the retirement age. At the same time, the number of people of working age will be decreasing. In this context, it appears that the pension system reform implemented in 1999 introduced a not very fortunate principle to the Polish pension system.
The debate on the potential reform of the Polish pension system has brought to light many fallacies about capital pillar of the system. Let’s clear some of them up.
Demographic change is not a tsunami. It proceeds gradually but steadily, just as the ocean’s tide. It can be foreseen if we simply choose to open our eyes and look at facts.
The proponents of the limited access to savings caught savers into a trap. Take it or leave it. Fortunately, also thanks to INESS, which also commented on the law in Parliament, there is a sort of exit option for savers, who don’t like the offered annuities but need some money from their savings. They can keep their savings account and withdraw at least annual yield.
Just before Christmas, it became clear that the prime minister and the two major labor unions had signed a memorandum which not only prevents raising the retirement age, but also fundamentally changes the pension model of Bulgaria. Noteworthy, the main agents behind this decision were the same people who in 2010 decided to steal 100 million leva from professional pension funds, thus breaking the Constitution.
The changes proposed by the government have met with a fierce resistance from economists and other experts, because the campaign against the funds is clearly demagogic, and the nationalization threat conflicts with Poland’s successful transformation from communism, which has been based on privatization since 1989.
So how do we imagine the liberal vision of equal opportunities policy in Poland? For sure, it should provide the opportunities to develop regardless of external circumstances such as descent, parents’ income, place of birth, race, sex and so forth.
A major pension reform was approved in a fast track procedure. The expense of this fast track procedure was not only the violation of legislative rules by the new parliament and government, but also lack of understanding of the long-term impact of this reform.