The government’s planned pension system overhaul could be unconstitutional, according to the legal advisors to Poland’s State Treasury.
The reform “entails taking away non-state property from legal entities and transferring it to a state organizational unit, and therefore is classic expropriation,” the lawyers wrote in a report.
Labor Minister Władysław Kosiniak-Kamysz disagreed with that opinion, arguing that experts in constitutional law and economists have voiced a different view. “The change is happening within a mandatory system, where guaranteed payouts are a rule, and this guarantee will be maintained,” he said.
The planned reform of the pension system involves shifting over half of the assets from the privately managed part of the system (open pension funds, or OFEs) to the state-run Social Insurance Institution (ZUS) in an attempt to reduce public debt. The overhaul will also ban OFEs from investing in instruments other than equity as well as corporate and municipal debentures.
The National Bank of Poland also expressed its view on the proposed reform, saying that an overhaul of the pension system is necessary. The central bank stressed, however, that the planned changes may involve legal risk. “This should be taken into account when proposed solutions are approved,” the NBP said.
The Financial Supervision Authority (KNF) also joined the Treasury’s legal advisors in their view that the reform may be unconstitutional. Restrictions on investment by private pension funds could in turn contribute to market volatility, the KNF said.
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