Abstract
The year 1999 marked the beginning of reforms in social insurance in Poland. Changes which were implemented then regarded mainly retirement insurance. Until the reform was introduced, the retirement insurance had operated under a pay-as-you-go system. However, political changes in Poland, as well as adverse demographic trends, led to ineffective functioning of the existing system of financing liabilities arising from retirement insurance. It was necessary to introduce changes that, above all, would allow for maintaining an appropriate level of retirement pension. The following article concentrates on one selected aspect of this insurance - Open Pension Funds (in Polish: Otwarte Fundusze Emerytalne; OFEs) and presents major changes occurring in 2002-2018, their reasons and effects. The analysis is mainly based on data from the Financial Supervision Authority and the Social Insurance Institution.
Highlights
The year 1999 marked the beginning of reforms in social insurance in Poland
One needs to notice that during the period of the Polish People’s Republic (1945–1989) the social insurance sector was centrally managed, and its daily running was entrusted to the Social Insurance Institution
The analysis is mainly based on data from the Financial Supervision Authority and the Social Insurance Institution
Summary
Reforms in social insurance adopted in Poland in 1999 was a radical change of the existing system. Most fundamental and most difficult changes regarded retirement insurance. Following the political changes in Poland (i.e., after the transition from socialism to capitalism and the introduction of free-market principles) which began in 1989, the government embarked on reforming most areas of social and economic life. Initial changes regarding social insurance were implemented as early as 1990. One needs to notice that during the period of the Polish People’s Republic (1945–1989) the social insurance sector was centrally managed, and its daily running was entrusted to the Social Insurance Institution (in Polish: Zakład Ubezpieczeń Społecznych; ZUS). Pension insurance was mandatory for most of the society, i.e., all employees and their families (excluding some occupational groups, e.g., soldiers; pension insurance for farmers was a separate issue, too)
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