Sustainable pension reforms: what can we learn from the experiences of Poland and other EU countries?

The aim of this chapter is to draw conclusions about the political economy of pension reforms. The author analyses the changes in the Polish pension system in the years 1999_2017 and the long-term pension projections (Working Group on Ageing Populations and Sustainability by the European Commission). According to pension projections most countries have already accommodated their pension systems to future demographic changes. However, the sustainability of the reforms depends on the commitment mechanisms that make them independent from the business or political cycles. Observations for Poland suggest that sustainable reforms were introduced by new governments with budget constraints. In addition, there is a tendency to introduce measures that allow a decline in the replacement rate despite inbuilt adjustment mechanisms. This chapter also points out a role of the cyclical fluctuations of long-term macroeconomic expectations. This can be an additional factor that explains why long-term pension reforms are usually introduced during economic downturns. JEL: H55, J11, J26