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Pension F unds and the F inancial C risis The ca se of Poland Wojciech Wyszynski Deputy Director Pension Investments Supervision Department. M ain F eatures of the Polish Pension System:. Diversified Based on d efined c ontribution formula Privately managed pension funds

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Pension Funds and theFinancial CrisisThe case of PolandWojciech WyszynskiDeputy Director PensionInvestmentsSupervisionDepartment


M ain f eatures of the polish pension system
Main Featuresof the Polish Pension System:

  • Diversified

  • Based on defined contribution formula

  • Privately managed pension funds

  • Accumulation and payout phases separated


The market in numbers as of 31 12 2008
The Market in Numbersas of 31.12.2008

  • Number of funds 14

  • Accumulated assets PLN 138.3 bln

  • Assets to GDP 10.9%

  • Contributions (in 2008) PLN 20.9 bln

  • Members 13.8 mln


Pensions f und s investment p erformance
Pensions Fund’s InvestmentPerformance

  • Sources of the increase of OPF’s assets (bln PLN, 1999 -IQ2009)


Crucial role of the open pension funds
Crucial Role of the Open Pension Funds




Effectiveness of opf i nvestment
Effectiveness of OPFInvestment


The i mpact of f inancial c risis on i ndividual p ension
The Impact of Financial Crisis on Individual Pension

  • The system now is in its early development stage, about 20 – 25 years before maturity (pension assets stable in relation to GDP).

  • Thus, the current pension from open pension funds constitutes only about 8% of the total retiree’s pension (this ratio will change gradually, reaching about 50% in fully matured two-pillar system).


The i mpact of f inancial c risis on i ndividual p ension 2
The Impact of Financial Crisis on Individual Pension (2)

  • In matured system, the 18-month crisis of that magnitude would result in the fall of total pension of about 11%, of which 8 p.p. attributed to stock marker shortfall.


Crisis and p ensions the p ublic d ebate
Crisis and Pensions – the Public Debate

  • Fortunately, there was no significant discussion about nationalization or temporal suspension of OPF operation.

  • The need for a better protection of pension funds assets against the adverse effects of economic cycles is recognized and amendments to pension law are being discussed.


Crisis and p ensions p ension r eform 1
Crisis and Pensions – Pension Reform (1)

  • The following elements of the funded pension system that need an upgrade have been identified:

  • Multi-funds: in a way similar to Chile or Mexico, pensioners should have a possibility to choose between safe and risky investment portfolios.


Crisis and p ensions p ension r eform 2
Crisis and Pensions – Pension Reform (2)

  • The following elements of the funded pension system that need an upgrade have been identified:

  • Capital adequacy: currently, there is no linkage between OPF’s assets and the capital of pension society that manages OPF.


Crisis and p ensions p ension r eform 3
Crisis and Pensions – Pension Reform (3)

  • The following elements of the funded pension system that need an upgrade have been identified:

  • There should be stronger linkage between fees and pension funds performance. Currently, the high profitability of pension societies has been almost unaffected by the crisis.


Crisis and p ensions p ension r eform 4
Crisis and Pensions – Pension Reform (4)

  • The following elements of the funded pension system that need an upgrade have been identified:

  • Tightened supervision: PFSA should have new tools for developing the risk-based supervision scheme and early warning systems.



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