Poland's lower house of parliament passed the governmental draft ofpension system reform, reducing the premiums transferred to privatepension funds (OFE) from 7.3% to 2.3% as of May 1, 2011. According toterms of the bill, Poland will trim the pension premium sent to privatepension funds (OFE) to 2.3% from the current 7.3%, then send thelingering 5% to newly created private accounts in the social security officeZUS which will grow at a rate tied to rolling averages of GDP growth. Theportion sent to OFE is to be increased to 3.5% as of 2017. Poland will alsocreate tax breaks for voluntary tax savings.
Such an outcome of the vote regarding the bill was widely expected. Nowthe bill would be sent to the higher house of parliament then to thepresident and if signed, will be introduced as a ruling law starting fromMay 1. We expect OFEs’ equity purchases to fall drastically in current yearand in years ahead. They are about to amount to PLN 4.4bn (-73.8% y/y)in 2011 and PLN 3.3bn (-26.0% y/y) in 2012. In our opinion this couldlower the number of new IPO procedures successfully concluded in 2H11and 2012.