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Expats in Poland await news on pension reform

Poland's Labour Ministry has opened a consultation on draft legislation to reform the private second-pillar pension scheme.

Among the elements included, is a proposal that the second-pillar scheme would transfer 51.5 per cent of its assets in to the state pension in February next year. This would include any holdings of government bonds, banking securities, and cash but not corporate bonds.

Second pillar schemes would initially be barred from investing in treasury bonds and would be required to place at least 75 per cent of assets into equities. A relaxation of investment policy is expected after the mid-point of next year.

Participation in such schemes would become optional from June 2014, and members would be entitled to switch between the state pension and the second-pillar every four years.

Second-pillar scheme members would pay 2.92 per cent of gross wages into a pension fund and 4.38 per cent into a sub-account for the state pension.

Those opting for state benefits would pay the entire 7.3 per cent into the subaccount.

Second-pillar scheme fees would be halved to 1.75 per cent, and the state pension processing fee would be halved to 0.4 per cent.

There is a brief public consultation before the bill will be passed to parliament, and Experts for Expats will keep track of this story as it evolves.

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