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3 sides of 1 coin – Long-term Fiscal Stability, Adequacy and Intergenerational Redistribution of the reformed Old-age Pension System in Poland

Author

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  • Janusz Jablonowski

    () (National Bank of Poland)

  • Christoph Müller

    () (Albert-Ludwigs-Universität Freiburg)

Abstract

In this paper we evaluate the long-term performance of the Polish public pension system from three perspectives: fiscal stability, intergenerational redistribution and adequacy of pension benefits. We assess the two recent public pension reforms undertaken in Poland: 1) the shift of a part of pension contributions from the funded to the unfunded pension pillar and 2) the gradual increase in retirement ages to 67 for both men and women. The results suggest that the combined effect of both reforms shows a significant improvement in cash balances until 2040. The burden of the reforms is shared relatively equally across generations. The effect of higher retirement ages on benefit levels is also positive, especially for those having standard job contracts. What is worrying, however, is the general future drop of benefit levels, in particular for the group of self-employed persons. Policy makers should, therefore, start discussing possible measures today if they aim to avoid a significant increase in old age poverty in the future.

Suggested Citation

  • Janusz Jablonowski & Christoph Müller, 2013. "3 sides of 1 coin – Long-term Fiscal Stability, Adequacy and Intergenerational Redistribution of the reformed Old-age Pension System in Poland," NBP Working Papers 145, Narodowy Bank Polski, Economic Research Department.
  • Handle: RePEc:nbp:nbpmis:145
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    File URL: http://www.nbp.pl/publikacje/materialy_i_studia/145_en.pdf
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    References listed on IDEAS

    as
    1. Balázs Égert, 2012. "The impact of changes in second pension pillars on public finances in Central and Eastern Europe," EconomiX Working Papers 2012-25, University of Paris Nanterre, EconomiX.
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    More about this item

    Keywords

    Generational Accounting; fiscal sustainability; fiscal policy; Poland; pension reform;

    JEL classification:

    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
    • H68 - Public Economics - - National Budget, Deficit, and Debt - - - Forecasts of Budgets, Deficits, and Debt
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General

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