Polish Struggle Over the Need of a Pension Reform

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In February 2012, the Prime Minister Donald Tusk's party proposed the pension reform that anticipates extending the retirement age both for men and women to 67 years. Is it really necessary to inscrease the retirement age to 67? Or should we search for other options that will not impose such harsh changes?

An obvious need for reform despite numerous objections

Author

Zuzanna Jablonska

01/01/2013 - 22:53

Due to inevitable demographic changes that trouble nowadays almost all the European countries, reforming obsolete pension systems seems necessary. However, the pension reform's proposal aroused a lot of objections not only among the opposition and trade unions, but also within the governmental coalition. Despite that, the Polish government has the courage, but above all, the common sense to propose this extremely unpopular reform.

Poland, just like other European countries, faces some important demographic changes: on the one hand, we are living longer and longer and the quality of life has increased, on the other hand, fewer children are born. No surprise then that the current pension system cannot handle such a spectacular increase in the number of pensioners accompanied by a progressive reduction of the working population.

Necessary and courageous though unwanted pension reform

Shortly after the victorious parliamentary election in October 2011, Donald Tusk's government has proposed the new pension reform which is raising a lot of controversy. Today, women reach retirement age at 60, men at 65. The Civil Platform's reform assumes that from 2013, the retirement age is to be gradually equalized for men and women, and increased - with the target of 67 years. Moreover, the proposal estimates the reduction of pension privileges when it comes to sometimes ridiculously early retirement age for policemen, firemen, soldiers etc., as well as for the mining sector (where workers who do not work directly on the extraction still can benefit from the miners' privileges) and a shift from funding pensions for priests by the State.

Numerous objections from all sides

While some opponents do not agree with the shape of the reform but assume the need of a profound change in the pension system, others do not even recognize its necessity, defending the status quo and the position of the beneficiaries of the pension privileges.

First, the pension reform's project has raised some objections within the governmental coalition. The Polish People's Party (PSL, Polskie Stronnictwo Ludowe is a centrist, agrarian and Christian democratic party), which entered a coalition with the Civic Platform in 2007 and extended it after the election in 2010, does not agree with the equalization of the retirment age for men and women. The coalition party PSL has proposed to allow mothers to retire earlier (3 years earlier for each child, up to 9 years), as well as the possibility of earlier retirement but with a lower pension. However, such a solution confirms the pattern according to which the duty of raising children rests only on women, instead of promoting modern parenting. Also, it would probably increase the gap between men's and women's pensions currently due to 5 years shorter contributions to social security for women.

Furthermore, the Polish trade union Solidarity, (Solidarność) together with Democratic Left Alliance (SLD, a social-democratic opposition party), have proposed a national referendum on pensions. Nevertheless, this clearly populist proposal is not a remedy for the inevitable reform of Polish social policies.

Finally, two main Polish trade unions Solidarity and All-Poland Alliance of Trade Unions (OPZZ) announce protests. They remind politicians of the need to create coherent pro-family, health and social policies to guarantee full social security for all Polish citizens. Sure they are right. This is why the government assured that the final reform's project is to be developed on the basis of large social consultations. But Polish citizens also need to get rid of some individual egoism and assume the inevitable demographic changes and what they entail - the unconditional need of raising the retirement age.

The 'absolute necessity' of extending the retirement age

Polish President Bronisław Komorowski has called the pension reform the 'abolute necessity' in order to provide the future retired people with decent pensions. If in 2010, for one Polish pensioner, there were four people in working age, in 2020 it will be three people, and in 2035 only two people. Without a doubt, it is the last bell to reform pension policy in Poland and thereby maintain the country's economic growth. The last bell that some prefer to ignore because raising the retirement age does not lie in the political interest of parties, even though the pension reform seems to be the absolute though unpopular necessity...

This article deliberately presents only one of the many existing points of views of this contorversial subject. Its content is not necessarily representative of its author's personal opinion. Please have a look at Duel Amical's philosophy.

This article convinced me.

Wrong measures to overcome the demographic crisis

Author

Maria Dziumak

01/14/2013 - 22:53

Recently the Polish Prime Minister has presented the new project of the pension reform which provoked a wave of criticism. This proposition highlights the need to push the age of retirement to 67 years for every Polish worker in order to overcome the social budget crisis. This measure evoked a huge social debate over its content among both the politicians of leading parties and those of the opposition and also among the workers themselves.

The social budget crisis is certainly a serious problem for the Polish government. Currently, ZUS (Zakład Ubezpieczen Społecznych, Social Insurance Institute), the main Polish institution collecting the funds for pensions, spends most of its monetary resources to pay the current pensions.

The necessity of pension reform

Thus, ZUS finds itself in a situation of financial impasse, without the possibility of making any savings and even with money owed to the private funds. Moreover, the weaknesses of the privatization process and more urgent public spending priorities impose on the state the investment of the estimated amount of 190 billion zlotys (about 50 billion euro) in the period of the following nine years in order to fill the gap in the budget. As the pension funds are supposed to give two-thirds of their resources to the government, much of the debt would be covered with the ZUS funds. Thus, the difficult financial situation requires introduction of new measures to overcome this crisis. However, the proposition of Mr. Donald Tusk seems to be far too drastic compared with other possibilities available that could also improve the Polish financial system.

Canadian system: a better solution?

Even if the pension reform consisting of the increase of the retirement age is a good measure to overcome the social budget crisis, its content should be different to the one proposed by the Prime Minister at the beginning of the year. There are plenty of projects presented by different politicians that are less harsh, more just and have a positive impact on the funds saving as well. The main opposition party, PiS (Prawo i Sprawiedliwosc, Peace and Justice) proposed the application of the Canadian system in the retirement structure. This project is based on the creation of so called “citizen’s pension” which would in turn guarantee the same pension for every worker, who payed the same fees. If somebody would like to obtain a higher pension, he or she would be welcomed to pay higher fees. This system is also supported by the vice Prime Minister, Waldemar Pawlak, the leader of the PSL (Polskie Stronnictwo Ludowe, Polish Popular Party). The PSL spokesperson, Krzysztof Kosiński, has recently stated that “it is a pity that our liberal partner does not want to support a liberal project”.

In the quest of a compromise

The controversial reform project seems unacceptable not only for the opposition and for the coalition party. Donald Tusk’s proposition is also widely criticized by the members of his own fraction. One of the PO members (Platforma Obywatelska, Civic Platform), Jan Rulewski, has presented his version of pension reform which could eventually lead to the compromise between the two leading parties. His project is based on the introduction of the retirement age of 67 years for men and at 65 for a women with the opportunity to obtain the pension earlier or later with specific pension calculation, according to individual cases.

The harsh social protest

Finally, the pension reform project is criticized by the workers themselves, especially by women, who find the age equalization unjust. They evoke the argument of unbalanced household work. According to the research led by professor Anna Titkow from PAN, (Polska Akadmia Naukowa, National Scientific Academy), work in the household takes about 40 hours per week for women and just 2-3 for men. These are the hours are unpaid. Thus, women claim that if retirement reform is to be introduced, the work in a household should also be divided equally between men and women, a reform which would be far more difficult to introduce for the government.