The Social Insurance Institution has prepared forecasts for future pensions in Poland. Oskar Sobolewski from the Pension Institute told TVN24 Biznes about what we need to prepare for. – Unfortunately, pensions will be more and more hungry with each passing year. We have to prepare that we will work after the age of 60 and 65 – says the expert.
Pension forecasts at PUE ZUS – how high will we receive benefits?
Every year, ZUS provides working Poles with information about the account balance – it can be checked online on the Electronic Services Platform. There is a settlement of all pension contributions paid – the last one on December 31, 2020.
Moreover, everyone who has reached the age of 35 receives a forecast for their future retirement pension. One of them assumes further work until retirement age with the same earnings. In the second variant, we finish work now and the pension we would just start receiving is shown.
According to ZUS forecasts, in the future, the old-age pension will correspond to roughly a quarter of the current salary.
“How to survive the month for PLN 1100-1300 a month? This is what the current 30-50-year-olds can expect” – we read in “Fakt”, which gave examples of two women who are to receive benefits in the amount of 1.8 thousand . PLN and 1.4 thousand. zloty.
– Information about the account balance is to make our clients aware that their retirement depends primarily on them. The current system is based on a simple assumption – how much you save during your professional activity, you will receive such a pension. Perhaps this will make our clients think about their future – quotes “Fakt”, the president of ZUS, prof. Gertrude Uścińska.
Pensions of Poles in the future – expert’s comment
We decided to ask an expert – Oskar Sobolewski from the Pension Institute, the founder of the Pension Debate – about whether we have to prepare for black scenarios.
– Looking today at the average salary of about PLN 5.8 thousand at the end of the second quarter of 2021, if we take 25 percent of it, it will turn out to be about PLN 1,450. Even if it were to be around PLN 1400-1600, these are the amounts that we will have in 40 years. However, the retirement pension may be lower for women, as it may drop to PLN 1,100-1,200, and for men it may approach PLN 2,000 – describes Sobolewski.
He emphasized that this is a reference “future retirement pension to today’s earnings”. – These benefits will be proportionately higher. Much depends on inflation, on the pace of wage growth and it is better to present it now on today’s amounts, because it shows the value of money today. What will happen in 30-40 years is difficult to imagine, because we may already be in the euro area then and there may be a different currency system, which is why I am not a supporter of the quota system – explains the expert.
Future pensions of Poles – lower and lower replacement rate
He also noted that “unfortunately, every year pensions will be more and more hungry”. – While in the next decade we will operate within 50 percent of the average wage, in 20-30 years we will fall to the level of 30-20 percent in terms of the replacement rate – he says.
The problem of Poles’ future pensions comes back regularly. In February The Pension Institute informedthat at the end of 2020, the replacement rate, i.e. the ratio of the average retirement pension to the average salary, had dropped to 42.4 percent. “In the period 2014-2020 there was a decrease in the replacement rate by 10.1 percentage points,” reads the IE report.
In turn, at the end of November 2019, in Twitter post deputy head of the Polish Development Fund Bartosz Marczuk He wrote: “Seat belts fastened? Who has weak nerves should not read. The official estimate of the amount of pensions in the future, which I received from ZUS. Now we get 53.8 percent of the last salary (about PLN 2.2 thousand). In 2045 it will be 32 percent ., in 2060 – 24.9 percent, and 2080 – 23.1 percent. It will be about PLN 1,000 per month (for today’s money) “.
This was later commented on by the Social Insurance Institution, which emphasized that the amount of salaries and social benefits is gradually increasing. This is due to economic growth. For example, it was indicated that in 2055 the forecast average pension will amount to approx. 7.6 thousand, which is the equivalent of today’s 3.1 thousand. zloty.
Sobolewski also points to this problem. – There are projections that it may even be below 20 percent, which is confirmed by women’s pensions, assuming that the retirement age will not change. From the statements of the ruling party and the largest opposition party – Civic Platform – it appears that we will not raise the retirement age. Unfortunately, this will increase the gender imbalance, as women will have much lower pensions, he says.
Polish pensions in the future – we will work longer
Sobolewski explains that although the COVID-19 pandemic has so far reversed this trend, “the average age in Poland will increase, which will also result in lower benefits”. – We have to prepare for the fact that these pensions will be starving. We also have to prepare that we will work after the age of 60 and 65. I cannot imagine that the retirement age will not be raised. I think that a reform to raise the retirement age will begin in 10-12 years. From the perspective of retirees – the sooner the better – he emphasizes.
In his opinion, people who imagine that in 30 years, when after the age of 60, when they retire, they will receive a benefit at a decent level, “unfortunately, they should be preparing today that it will not be like that”. – Pensions will be lower and lower, especially in the case of people who do not have the initial capital, i.e. who started their professional activity after 1999 – he emphasizes.
Can this be remedied? – Additional saving under the second and third pension pillar is necessary, i.e. PPE, PPK, IKE and IKZE. This is the minimum that every working person should have in addition to the first pillar retirement pension from the Social Insurance Institution. This is something we must, should, and well do, but it is not a remedy for all retirement issues. In addition, we should also save – believes the IE expert.
PPE is Employee Pension Programs, PPK – Employee Capital Plans, IKE – Individual Retirement Account, and IKZE – Individual Retirement Security Account.
Retirement projections – more difficult situation for women
Moreover, Sobolewski points out that Polish women will receive lower benefits than men. This is for three reasons.
– The situation of women is much worse than that of men because of the lower retirement age, indirectly greater predictable life expectancy on the basis of which the pension is calculated (the higher the value of life expectancy, the lower the pension). Women also have more non-contributory years – for example due to maternity and parental leave – she explains.
He adds that “today the difference between men and women is around 1000 zlotys”.
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