Retirement Packages Slowly Killing ZUS

According to the Gazeta Prawna it is estimated a further 199 bln zloty will be needed to pay retirement payments between the years 2008 and 2012. Experts predict, if amendments extending the retirement age in Poland are not implemented and additional retirement benefits are not reduced, ZUS will be threatened with bankruptcy.

Currently the official retirement age in Poland is 60 for women and 65 for men. Early retirement packages mean that the actual average is much lower.

The main problem lies with early retirement legislation. There is a wide range of provisions dating back to the early 80s.
During the post marshal law years the government was being generous with offering extended retirement packages across various professions.

Dancers for example were permitted to enter early retirement at
the age of 40. Today most of these provisions are still in existence allowing for broad rights that impedes the system.
According to Prof. Marek Gora who is working on retirement legislation reform, changes are mandatory, as Poland cannot afford to fund superannuation for people who are entering retirement while still at a productive age.

If early retirement provisions are to continue, monthly social security payments will have to increase across the board. This will also apply to increases in taxation. This approach however will solve little as Poland’s average life expectancy continues to rise. Since 1990 the average life expectancy for males has increased by 5 years and 4 and a half years for women. Poles are leading healthier lifestyles and their general health has also improved.

In the last year women taking advantage of early retirement were on average 56 years old, men 57.9 years old. The average age in the EU is 60.4 for women and 61.4 for men. In the UK and in Ireland those who enter retirement are 64 years old.

Early retirement legislation in Poland means that Poland has the lowest percent of workers aged between 55 and 64 years in the EU at 28.1 percent. The average for the EU is 43.5 percent.

Today nearly all women who have reached 55 years are eligible for early retirement.

The Constitutional Tribunal ruling last Tuesday may mean that all men who have reached 60 years of age and have 35 years of productive work behind them may be able to enter early retirement.

Experts are pushing for quick restructuring of the existing laws. The push wants to see an increase in the retirement age and a termination of any additional retirement benefits. Gora emphasizes that the general belief in Poland that early retirement opens up job opportunities for the young is a myth. Poland has the highest unemployment rate in Europe after Slovakia and a very large number of young retirees.
New EU Member States are increasing their retirement ages systematically. All except Poland. The Czech Republic will see its retirement age raised to 63 years for both men and women. Slovakia is increasing the retirement age by 9 months each year until 2014.

The Civic Platform (PO) has plans to increase the retirement age to 65 for both men and women by 2020 and to 67 by 2025.
If such unpopular reform is to be introduced, it must be done quickly ? before the electorate starts preparing for the next elections.

Leave a Reply

Your email address will not be published.