Comments on the grounds of changes to the pension scheme provided by the government on Jan. 24, 2011, together with an alternative proposal to change the amount of contributions to pension funds

Tags: system_projects, macroeconomics, labour_market, publications_from_2011

Publication date: 14.03.2011

This document presents the results of the analysis conducted by IBS in the work team for the social security problem of the Trilateral Commission, devoted to proposals for changes to government pension scheme, presented in the government's support of 24/01/2011. In the first point, we conduct the discussion of macroeconomic assumptions adopted by the government, comparing them with their own scenario of absence of institutional changes in the labor market and the macroeconomic scenario of the European Commission (Working Group on Ageing Populations and Sustainability). It shows that the government's macroeconomic scenario is the most optimistic, particularly in relation to the evolution of the labor market. The second section compares the impact on the amount of pensions and replacement rates of different variants of changes in the pension system. Consideration was given to maintain the current level of contributions to pension funds and persistent and transient its reduction, as well as two options for gradually raising the investment limit of pension funds in equities. The third section includes the gap and the probability of finding work at different times of life, which exist between men and women with different educational levels. This provides additional information showing how the changes proposed by the government and other variants of organization of the pension system affect the expectation of a pension for the low-and high-educated. In the fourth point indirect variant of changes in the pension system has been drafted, which, by reducing the borrowing needs of countries for the transfer of contributions to the pension funds makes it possible to raise pensions and replacement rates. We propose to determine its contribution to the pension funds at 5 percent since 2015. We show how this affects the amount of pensions and reducing the borrowing needs of the state.

Publication in Polish.

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