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Tuesday, November 30, 2021

Open Pension Funds – liquidation. Waldemar Buda comments

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The PiS government has announced the liquidation of open-ended pension funds has not yet been passed. Deputy Minister of Funds and Regional Policy, Waldemar Buda, informed that at present there are no political decisions to return to the bill in this matter. “We don’t know when the time will be right,” he added.

Waldemar Buda at the Thursday conference at the Warsaw Stock Exchange said that “for complicated reasons the act transforming the OFE has not been brought to the end”. – This project went through the whole cycle of consultations between parliamentary committees and the Council of Ministers and it turned out that we had a pandemic, uncertainty on the stock exchanges, and therefore we did not come back to it. It is not known when it will be a good time for this, as the dynamics in terms of the assets accumulated there is serious and there are no political decisions to return to the project, said the deputy minister of funds.

– This is not a good time to make these changes – we have a pandemic, high inflation. We didn’t want to go about it now, when financial markets are unstable and assets are uncertain. Rather, at the moment, at least in the annual perspective, we would not come back to this – added Buda.

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Liquidation of OFE “frozen”

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A government bill amending certain acts in connection with the transfer of funds from open pension funds to individual pension accounts was being processed in the Sejm. April 20 this year. a third reading was to be heldbut eventually the item was taken off the agenda. – The official version is that, at the request of the government, the item on the transformation of open pension funds (OFE) was removed from the agenda, while the unofficial one that Solidarna Polska did not consent. And this shows that the quarreling right is constantly eating under the carpet – said in an interview with TVN24 Deputy Speaker of the Sejm Piotr Zgorzelski from PSL.

The third reading, in the parliamentary procedure, is simply voting on the adoption of the act along with any amendments proposed to the draft at an earlier stage. Then the regulations would go to the Senate. The regulations were to enter into force on June 1, 2021, but this did not happen. As it was later reported, the legislative process of the new bill was to start in September.

The project “frozen” in the Sejm assumed that each OFE participant was to have two options to choose from. By default, it was supposed to be a transfer of funds from OFE to an individual retirement account (IKE) with 15% of them being withdrawn. in the form of – as the government defined it – a transformation fee. The money was to be inherited, but further payments to IKE would be only voluntary; no part of later pension contributions would go there.

The second option – which was assumed – was to submit a declaration on the transfer of your funds to an account with the Social Insurance Institution, acting on behalf and for the benefit of the Social Insurance Fund. This money would not be inherited. They were to be credited to an individual account at ZUS, and the corresponding assets would go to the Demographic Reserve Fund.

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