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How does the pension system in Poland prevent old-age poverty?

Author

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  • Teresa Hanna Bednarczyk

    (Maria-Curie Sklodowska University)

Abstract

The old-age pension systems are the largest component of social protection and pursue a variety of social goals. This paper focuses on old-age poverty protection as the key aspect of the adequacy of pensions. The main purpose of this work is to assess, whether the Polish pension scheme provides sufficient protection against income poverty for future pensioners? The following hypothesis was verified: institutional solutions in the current Polish pension scheme will not provide sufficient protection against poverty for all future pensioners. The research methods used included a review of the subject literature and an empirical analysis of statistical data. The research findings show that the statutory pension scheme in Poland does not protect well all future pensioners against income poverty. Transition to pensions based on lifetime contributions will lead to lower adequacy and an increased risk of poverty among elderly population. A minimum insurance period of 25 years for men and 20 years for women is required to obtain the right to a guaranteed minimum-pension. Persons, who do not meet this condition receive extremely low pensions (so-called penny pensions). Unfortunately, their number is still growing. Therefore, further changes in the pension system are advisable.

Suggested Citation

  • Teresa Hanna Bednarczyk, 2018. "How does the pension system in Poland prevent old-age poverty?," Proceedings of Economics and Finance Conferences 6909956, International Institute of Social and Economic Sciences.
  • Handle: RePEc:sek:iefpro:6909956
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    File URL: https://iises.net/proceedings/10th-economics-finance-conference-rome/table-of-content/detail?cid=69&iid=005&rid=9956
    File Function: First version, 2018
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    More about this item

    Keywords

    public pension system; pensioner; poverty; demographic aging; replacement rate;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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