The Polish Minister of Finance, Jacek Rostowski, introduced a proposal aimed at diminishing the role of private savings in the Polish pension system. Clearly, the ministry weighs a positive short-term impact of the planned measure on public finance (it would allow the ministry to support the struggling economy) against a prospective negative longer-term impact. However, the proposed changes surprised markets rather positively as Mr. Rostowski said the option of private pension funds´ liquidation had not been recommended.
Regarding the impact on public finance, the most interesting part seems to be the transfer of government bonds currently held by private funds to the Social Insurance Institution (ZUS) which would, according to the ministry, reduce the debt by about 11 % of GDP. At the same time, however, the share of foreign holders - whose investments are generally less stable than those of domestic investors - of the overall Polish debt would probably rise. On the other hand, prospective scrapping of the limit to private funds’ investments into shares (currently 47.5 % of assets) could further support local capital market.
According to the FinMin, the proposal will be subject to public discussion lasting 30 days or more.