Public Pension System and Outlook
The prospects of the Polish public pension system raise concerns about its adequacy over the longterm, particularly for poorer pensioners, women, and non-standard employees. Without any reforms, by 2050, the benefit ratio would decline from 45 to 29 percent due to unfavorable demographics. The steep decline in the benefit ratio implies a convergence of the average pension to the minimum pension, eventually resembling a universal system. Counteracting the effects of population aging to maintain the benefit ratio would be fiscally costly, as spending on pensions would need to increase by some 6 ppts of GDP by 2050. Options to maintain pension adequacy in a fiscally sustainable manner are limited and may be challenging to implement. Thus, a comprehensive multi-pronged approach is recommended to help cushion the effects of population aging, including extending working lives, pursuing active labor market policies, supporting household savings, and basing contributions of the self-employed on actual income.
A. Pension System Overview
1. The general pension scheme dominates the public pension system in Poland. The Polish public pension system consists of three major social insurance systems: the general pension system, the farmers' pension system, and the security provision system.1 The general pension system covers most employees and self-employed and includes two mandatory and one voluntary pillars (Table 1):
Pillar 1 constitutes the largest share of pension expenditures and pensioners and operates as a notional defined contribution (NDC) pay-as-you-go system managed by the Social Insurance Institution (ZUS), where current employees’ contributions, supplemented by state budget transfers, finance current pensions.
Pillar 2 operates as a funded Defined Contribution (DC) system managed by private institutions (open pension funds, Otwarty Fundusz Emerytalny, OFEs). While Pillar 2 is part of the mandatory arm of the pension system, participation in Pillar 2 is voluntary, and the decision to participate does not affect the total contribution rate. This means that when a person decides to forgo participating in Pillar 2, their pension contribution is directed in full toward Pillar 1 (see Text Table 1, contributions options 1, 2, and 3). At end-March 2024, there were 8 OFEs, serving 14.5 million members, and managing PLN 222 bn (about 6.5 percent of 2023 GDP) in assets.2
Pillar 3 is voluntary and set up to supplement future benefits. It includes several products, with the most recent addition of the Employee Capital Plans (PPK). Although voluntary, the introduction of financial incentives and auto-enrollment in the PPK has helped increase total participation to 48.4 percent, with the net asset value reaching PLN 27.4 bn (0.8 percent of GDP) by mid-2024 (PFR Portal PPK Monthly Newsletter 2024). All products of Pillar 3 had an accumulated asset value of about 1.7 percent of GDP at the end of 2022 (Economic Policy Committee Ageing Working Group 2023).
Poland: General Pension System Structure
Poland: General Pension System Structure
|
Pillar 1 |
Pillar 2 |
Pilar 3 | ||||||
|---|---|---|---|---|---|---|---|---|
|
Non-financial |
Financial |
Occupational Pension Scheme (PPE) |
Individual Pension Account (IKE) |
Individual Pension Security (IKZE) |
Employee Capital Plans (PPK) | |||
|
Pay-as-you-go, NDC |
Fully funded, DC |
Fully funded, DC |
Fully funded, DC |
Fully funded, DC |
Fully funded, DC | |||
|
Managed by: |
ZUS |
Pension funds |
Investment funds chosen by employer |
Financial Market Institutions | ||||
|
Participation: |
Mandatory |
Mandatory |
Possible to resign |
Voluntary |
Voluntary |
Voluntary |
Automatic enrollment. Able to opt out. | |
|
Form: |
Main account in ZUS NDC 1st account 1/ |
Sub-acount in ZUS NDC 2nd account 1/ |
Open Pension Fund (OFE) | |||||
|
Base |
Gross wage |
Gross wage |
Gross wage |
Gross wage |
Gross wage |
Gross wage |
Gross wage | |
|
Contibutions: Option 1 Option 2 Option 3 |
19.52% 12.22% 12.22% |
7.30% 4.38% |
2.92% |
Employer: 3.5% - 7% |
Own choice, capped |
Own choice, capped |
Employee: 2% (+ voluntary up to 2%) Employer: 1.5% (+ voluntary up to 2.5%) State: Single PLN 250 + annual PLN 240 | |
|
Contributions paid by: |
1/2 employee, 1/2 employer |
1/2 employee, 1/2 employer |
1/2 employee, 1/2 employer |
Employer |
Employee |
Employee |
Employee, employer, state | |
Poland: General Pension System Structure
|
Pillar 1 |
Pillar 2 |
Pilar 3 | ||||||
|---|---|---|---|---|---|---|---|---|
|
Non-financial |
Financial |
Occupational Pension Scheme (PPE) |
Individual Pension Account (IKE) |
Individual Pension Security (IKZE) |
Employee Capital Plans (PPK) | |||
|
Pay-as-you-go, NDC |
Fully funded, DC |
Fully funded, DC |
Fully funded, DC |
Fully funded, DC |
Fully funded, DC | |||
|
Managed by: |
ZUS |
Pension funds |
Investment funds chosen by employer |
Financial Market Institutions | ||||
|
Participation: |
Mandatory |
Mandatory |
Possible to resign |
Voluntary |
Voluntary |
Voluntary |
Automatic enrollment. Able to opt out. | |
|
Form: |
Main account in ZUS NDC 1st account 1/ |
Sub-acount in ZUS NDC 2nd account 1/ |
Open Pension Fund (OFE) | |||||
|
Base |
Gross wage |
Gross wage |
Gross wage |
Gross wage |
Gross wage |
Gross wage |
Gross wage | |
|
Contibutions: Option 1 Option 2 Option 3 |
19.52% 12.22% 12.22% |
7.30% 4.38% |
2.92% |
Employer: 3.5% - 7% |
Own choice, capped |
Own choice, capped |
Employee: 2% (+ voluntary up to 2%) Employer: 1.5% (+ voluntary up to 2.5%) State: Single PLN 250 + annual PLN 240 | |
|
Contributions paid by: |
1/2 employee, 1/2 employer |
1/2 employee, 1/2 employer |
1/2 employee, 1/2 employer |
Employer |
Employee |
Employee |
Employee, employer, state | |
2. Poland's public pension coverage ratio has increased substantially during the last two decades, with the coverage ratio – the number of contributors over the labor force –increasing from about 75 percent in 2003 to 92 percent in 2022, as the number of contributors well outpaced the labor force growth rate (text chart). The statutory retirement age of 65 years for men and 60 years for women has remained in place for decades, but the effective retirement age has fluctuated somewhat. During 2017-22, the average effective retirement age increased marginally for men and decreased slightly for women, reaching 64.9 years for men and 60.6 years for women in 2022 (Social Insurance Institution, 2023).
Public Pension Coverage Ratio
(In percent 1/)
Citation: IMF Staff Country Reports 2025, 007; 10.5089/9798400298929.002.A002
Sources: ZUS; Haver Analytics; and IMF staff calcuations.1/ Defined as the ratio of contributors to labor force. Constributors defined as the number of insured persons. Labor force is defined as active population aged over 15 years.3. Contributions primarily finance Pillar 1 of the general pensions system, but transfers from the budget are also needed to fill the gap. In 2022, pension contributions to the general pension system covered about 84 percent of the total expenditures of ZUS, and the state budget allocation amounted to about 1.3 percent of GDP (Social Insurance Institution 2023). Under the baseline, the pension fund is forecast to remain in deficit over the entire period (until 2080, text chart; Social Security Institution 2019).
ZUS: Annual balance of the pension fund
(Percentage of GDP)
Citation: IMF Staff Country Reports 2025, 007; 10.5089/9798400298929.002.A002
Sources: ZUS, “Pension fund forecast of revenues and expenditures until 2080”, May 2019.B. Pension Projections
4. Over the next few decades, Poland is projected to have one of the fastest-aging populations in Europe. The current population of Poland is still young, and the share of the older population aged 65 and above constitutes only 19.2 percent (vs. 21.2 percent EU27 average). However, the population is aging mainly due to low fertility and increased longevity, and is expected to decline by about 3.5 million by 2050 (from 38.1 million in 2022 to 34.6 million in 2050). Meanwhile, the old-age dependency ratio is set to increase significantly from 31.9 to 55.4 percent during 2022-50 (text chart) (European Commission 2024).
Old-Age Dependency Ratio
(In percent)
Citation: IMF Staff Country Reports 2025, 007; 10.5089/9798400298929.002.A002
Sources: 2024 Population Ageing Report.1/ Defined as population aged 65+ over aged 20-64, in percent.5. Public pension expenditure, however, is projected to remain constant in percent of GDP, as a declining benefit ratio largely offsets worsening demographics. Under the baseline, the gross public pension expenditure-to-GDP ratio is projected to remain broadly unchanged at about 10-11 percent of GDP during 2022-50 (Figure 1, graphs 1 and 2)3. In the NDC system, the negative impact of demographic change on pension expenditure is primarily offset by the decline in pension benefits (the benefit ratio, defined as the ratio of average pension to average wage). Thus, the benefit ratio is expected to decline from 45 to 29 percent by 2050, more than the EU average (text chart; Figure 1, graphs 3 and 5).4 To some extent, this decline in benefits is a consequence of the transition from the old pension system that existed before the 1999 pension reform to the current NDC system. 5 In the NDC system, a further part of the decline results from the pension formulas, as the steep decline in employment growth feeds into slower wage bill growth, resulting in lower valorization of pension benefits, combined with assumptions about increasing life expectancy and a constant retirement age.
Public Pension Benefit Ratio
(In percent)
Citation: IMF Staff Country Reports 2025, 007; 10.5089/9798400298929.002.A002
Sources: 2024 Ageing Report.Population Ageing and Falling Pension Replacement Rates
(In percentage points, projected change during 2022-50)
Citation: IMF Staff Country Reports 2025, 007; 10.5089/9798400298929.002.A002
Sources: EC 2024 Ageing Report.1/ Defined as the ratio of persons aged 65 and older to persons aged 20-64.2/ Defined as gross replacement rate at retirement (old-age earnings-related public pensions).6. In an illustrative scenario where benefit ratios remain fixed, pension expenditures would be about 6.3 ppts of GDP higher in 2050 than in 2022, raising the total pension expenditures from about 11 to some 17 percent of GDP.6 Benefits decline due to worsening demographics, which are particularly strong in the 2040-50 and 2050-60 periods, reflecting the aging of the post-war baby boomers (Text Figure 1, graph 2), (Economic Policy Committee Ageing Working Group 2023). Under the 2024 Ageing Report scenario, which allows some decline in the benefit ratio (10 percent relative to the 2022 level), additional payments would be required around 2035 and pension expenditures would need to increase by some 4 ppts of GDP by 2050 (text chart) (European Commission 2024).
Public Pensions: Constant Benefit Scenario
(In percentage points of GDP, 2022-50 change 1/)
Citation: IMF Staff Country Reports 2025, 007; 10.5089/9798400298929.002.A002
Sources: EC 2024 Population Ageing Report.1/ Change in public pension gross expenditure in percent of GDP under a "constant benefit scenario", where the benefit ratio is allowed to decline by 10 percent relative to the 2022 level.2024 Ageing Report Forecasts
Citation: IMF Staff Country Reports 2025, 007; 10.5089/9798400298929.002.A002
Public Pension Forecast and Contributing Factors
Citation: IMF Staff Country Reports 2025, 007; 10.5089/9798400298929.002.A002
C. Challenges
7. The steep projected benefit ratio decline raises concerns over the system’s adequacy and social sustainability. The benefit ratio declined during 2015-22 (text chart) as average wages outpaced average pensions. Additional top-ups have already been introduced to support pensions, including through the 13the pension and 14th pension (introduced in 2019 and 2021 respectively), financed from the state budget and introduced initially as one-off cash benefits. The minimum pension top-ups are also rising, financed through the state budget.
Benefit Ratio
(In percent)
Citation: IMF Staff Country Reports 2025, 007; 10.5089/9798400298929.002.A002
Sources: Ministry of Finance; and IMF staff cacluations.8. Given the decline in formula-based pensions, the average pension is expected to converge to the minimum pension. Persons who reached the retirement age and completed an insurance period of 25/20 years for men/women qualify for a boost to reach the minimum (social) pension.7 In the current NDC system, the average pension to minimum pension ratio would be expected to approach unity, resembling a universal pension system (text chart).
Ratio of Average Pension to Minimum Pension
(Ratio 1/)
Citation: IMF Staff Country Reports 2025, 007; 10.5089/9798400298929.002.A002
Sources: IMF, World Economic Outlook; and IMF staff calculations.Sources: 2024 Ageing Report; Ministry of Finance; and IMF staff calculations.1/ In this calculation minimum pensions are indexed by the CPI plus 0.2*(real wage growth).9. Furthermore, the number of individuals receiving less-than-minimum pensions continues to increase, driven by part-time workers, mostly women. Some retirees do not have the required work experience to be eligible for a minimum pension. The number of pensioners receiving below-the-minimum pensions increased ten-fold during 2012-22 from about 36 thousand to 365 thousand individuals, driven by growth in part-time workers, rising from 4.4 percent to 9.6 percent of pensions paid (under the new system) (Text Figure 2)8. Women constitute the majority, as over 80 percent of less-than-minimum pension recipients in 2022 were women.
Below-Minimum Pensions
Citation: IMF Staff Country Reports 2025, 007; 10.5089/9798400298929.002.A002
D. Pension Inequities…
10. Pension adequacy will increasingly depend on longer working lives across the EU. The 2024 Pension Adequacy Report (Council of the European Union 2024) calculates counterfactual scenario replacement rates, called Theoretical Replacement Rates (TRR).9 These simulations show that, for a standard 40-year career, TRRs are set to fall during the next four decades in most countries, including a significant decline in Poland over 2022-62. This suggests that extending one’s career to accrue higher pension benefits is critical to maintaining pension adequacy.
…By Gender
11. Pension replacement rates in Poland among women tend to be lower than those among men, resulting in a gender gap. Women, on average, have lower pensionable earnings, lower statutory retirement age, and lower average contributory periods. As a result, women receive lower pensions than men with lower benefit ratios (Text Figure 4, graph 1). Their benefit ratios are also expected to decline and remain below those of men (Text Figure 4, graph 2).
Benefit Ratios by Gender
Citation: IMF Staff Country Reports 2025, 007; 10.5089/9798400298929.002.A002
12. As a result, and similar to all EU countries, older Polish women face a higher poverty risk than men, particularly if they are single. With the share of women not qualifying for the social (minimum) pension increasing, this poses a risk of old-age poverty, all the more as women also tend to leave the labor market early but live longer on average. Both poverty and deprivation risks in old age are higher for women than men in all EU member states, and living single in old age further increases the poverty risk for women relative to men. In Poland, however, the overall at-risk-of-poverty rate is lower than the EU average (15.2 vs. 17.3) and has declined over time (Council of the European Union, 2024).
…By Type of Employment
13. Many non-standard workers can expect pension prospects to be worse than those of employees. Although the share of non-standard employment (self-employed, temporary, part-time) has declined over the last decade, non-standard workers constitute more than one-third of total employment in Poland (text chart). As of 2024Q2, about 11 percent of pension contributors to the Social Insurance institution were self-employed (with and without employees) and another 8 percent were working on the basis of civil code contracts.10 Non-standard employees, such as temporary and self-employed workers, face heightened pension adequacy concerns.
Non-Standard Employment
(In percent of total employment 1/)
Citation: IMF Staff Country Reports 2025, 007; 10.5089/9798400298929.002.A002
Sources: Eurostat; and IMF staff calculations.1/ 15-64 years old.14. Temporary workers, particularly workers on civil law contracts, may face lower pensions upon retirement. Civil law contracts are a special category of non-standard contracts used to contract labor. They include two types: the contract to perform specified work and the contract of mandate, with the latter being more prevalent. The number of workers on civil law contracts has increased since the early 2000s. Civil law contract jobs tend to be less regulated than other types of temporary work (for instance, fixed-term, temporary agency work) in various areas, including protection against dismissal, worker rights, and social security coverage. Persons working under civil law contracts often tend to be less educated and frequently earn less than the standard employees. Low contributions of civil law workers will likely result in lower pensions relative to employees even if they spend only a share of their careers working under civil law contracts (Lewandowski 2018)11.
15. Like many EU member states, pension rules differ between employees and the selfemployed in Poland. The general pension system in Poland covers the self-employed, and, in principle, they pay the same contribution rates, but the base is different from that of employees. The base is equal for all self-employed and amounts to about 60 percent of the average wage (OECD 2023b). As a result, most self-employed workers pay relatively low contributions because only a flat-rate amount is mandatory, which lowers their future benefits in the NDC scheme. Simulations show that self-employed in Poland face pensions equivalent to about 60 percent of those expected by the employees (text chart; Council of the European Union 2024).
Theoretical Relative Pensions of the Self-Employed
(In percent of those employed; selected OECD economies 1/)
Citation: IMF Staff Country Reports 2025, 007; 10.5089/9798400298929.002.A002
Sources: OECD Pensions at a Glance 2021 (OECD pension models).1/ Theoretical pensions of a self-employed worker relative to an employee having both a taxable income (net income or net wage before taxes) equal to the average net wage before taxes, for individuals with a full career from age 22 in 2018 and contributing only the amount that is (quasi) mandatory to pensions.E. Pension Funds’ Role in Capital Markets
16. Over the last two decades OFEs have played a notable role in the domestic capital markets, but their importance is likely to continue declining in the future. At the initial stage, OFEs’ assets grew rapidly, mainly driven by inflows of new contributions from ZUS (Osinski and Tymoczko 2007) (Text Figure 5, graph 1). Along with their assets, OFEs' role in the domestic capital markets continued to increase, as assets were primarily invested in the domestic government debt securities and equities. For instance, OFEs' investment portfolio comprised about 60 percent of treasury securities and 34 percent of equities in 2007 (Sobolewski and Tymoczko 2012).12 In 2014, however, Pillar 2 was scaled back by transferring about half of pension fund assets to Pillar 1 (Krogulski, et al. 2014)13. This, combined with the elimination of the requirement for mandatory participation in Pillar 2, led to a sharp decline in OFEs' assets in 2014 and a lasting decline in the number of OFEs and their membership afterwards. For instance, during 2017-24Q1 alone, the number of OFEs declined from 12 to 8, and their membership dropped from 16.4 million to 14.5 million. OFEs’ assets declined sharply in 2014 and relatively stable afterwards in percent of GDP14, registering about 6.5 percent of 2023 GDP in March 2024. Now, OFEs are heavily exposed to the domestic equity market, with 82 percent of their portfolio invested in domestic equities and another 10 percent in foreign instruments (Figure 5, graph 2). In the future, OFEs will likely continue downsizing amid the membership decline.
Assets of OFEs
Citation: IMF Staff Country Reports 2025, 007; 10.5089/9798400298929.002.A002
17. The growing importance of the voluntary pension scheme PPK has the potential to increase savings and counteract declining benefit ratios. The growth of PPK assets should partly offset the ongoing decline in Pillar 2 investments, and help create additional appetite for domestic securities and increase foreign investors' interest in the domestic capital market. This is because a larger presence of domestic institutional investors tends to increase the international demand for domestic securities, as foreign investors appreciate the presence of other strong players with different risk profiles, such as domestic pension funds. PPK not only may be able to mitigate potential effects of diminishing OFEs on equity prices, but also create pension portfolios that are more aligned with the long-term interest of individuals (Gragnani and Rudolph 2019).
F. Conclusions and Recommendations
18. Under the current rules, implicit pension liabilities for the government could increase by some 6 ppts of GDP by 2050 to maintain pension adequacy. Long-term fiscal pressures from population aging will weigh on fiscal sustainability as implicit liabilities related to pensions are expected to increase. Both increases in longevity and declining aggregate employment lower pension benefits through automatic adjustments built into the NDC. Adjusting benefits to life expectancy at retirement and employment size will substantially lower future pensions in Poland. To counteract population ageing, pension expenditures would need to increase by about 6 ppts of GDP by 2050.
19. A comprehensive multi-pronged approach is needed to improve pension adequacy and slow the effect of population aging. Some potential measures include:
Equalize statutory retirement age for men and women and increase it over time with life expectancy. Extending working lives through a gradual alignment of male and female statutory retirement ages and then increasing the retirement age in line with life expectancy gains while in good health would help lower the implicit fiscal cost of pension liabilities over the long-term. Estimated savings to public pension expenditures would be about 0.9 ppts of GDP by 2050 (Economic Policy Committee, Ageing Working Group, 2023).
Extend working lives and incentivize pensioners to work. Without sufficient consensus to increase the statutory retirement age, efforts to increase the effective retirement age would be welcome, although they carry fiscal costs (tax incentives). Existing rules incentivize pensioners to work, which is welcome, but there are currently mixed messages in the pension system that should be realigned. On the one hand, the “PIT-0” scheme created a tax allowance for men and women aged older than the statutory retirement age who do not claim retirement or disability benefits and continue to work, thus, incentivizing pensioners to extend working lives. Although the fiscal savings are reduced by the cost of incentives provided (OECD 2023c). On the other hand, however, pensioners who work past their retirement age do not qualify for the 13th and 14th pension payment benefits, thus, disincentivizing working after reaching the statutory retirement age.
Introduce a minimum contributory period. Currently, there is no minimum contributory period in place. This means that if a person contributed even a very small amount, they would receive it back with accumulated interest in pension payments upon retirement. However, even small transactions incur administrative costs. In addition, introducing a minimum contributory period may help improve the pension outlook and encourage workers to extend their working lives.
Pursue active labor market policies and increase labor participation. Active labor market policies would help reduce the shadow economy, raise the labor force participation rate, and increase contributors. There is scope to bring more older people and women into the labor force. For instance, removing barriers to young parents’ working, such as improving the availability of affordable childcare and establishing options for elderly care, would help mobilize young parents into the workforce, particularly women. Promoting part-time work could also help younger generations (e.g., students) and young women caring for children and older people contribute more to the labor market and increase contributions toward future pensions.
Improve workers' skills and better integrate vulnerable groups into the labor market. Lack of skills is often one the key contributors to early withdrawal from the labor market. Extending the period of labor market participation should be supported by lifelong learning and promoting best practices in training, as skills development is necessary for personal growth, labor market mobility, attractiveness to prospective employers, and higher quality of life. Greater mobilization into the labor market of persons with disabilities is also needed to increase their labor market participation.
Raise the minimum level of support for the poorest pensioners. The 2023 Global Pension Index (Mercer CFA Institute 2023) ranks Poland relatively low on adequacy and sustainability, which may call for increasing pension adequacy for the poorest pensioners. Of course, this would come at a fiscal cost.
Promote and increase the level of household savings in the economy. Despite the challenging outlook of the pension system, Poland continues to have one of the lowest household savings rates in the EU. Past policy reversals of pension savings, such as transferring Pillar 2 funds to Pillar 1, could be undermining confidence for participation in the voluntary pension pillar (OECD 2023c). For the future development of the third pillar, such as the PPK, it is essential to maintain regulatory stability to rebuild trust in the scheme, given that Pillar 3 can help improve future benefit ratios. Thus, workers should be reminded that, unlike Pillar 2, PPK funds are private and can be withdrawn at any time (tax-free if withdrawn upon reaching 60). Increasing financial education and communication to pension account holders about their pension prospects would also help raise awareness of their pension prospects and help incentivize private saving.
Base contributions of the self-employed on actual income. This would help improve future pensions of the self-employed and close the gap between the self-employed and employees.
References
Council of the European Union. 2024. “The 2024 Pension Adequacy Report: Current and Future Adequacy in Old Age in the EU.” Brussels.
Department of statistics and actuarial forecasts. 2023. “New System Pensions Paid in December 2022 in an Amount Lower than the Minimum Pension.” Warsaw.
Economic Policy Committee Ageing Working Group. 2023. “2024 Ageing Report. Poland Country Fiche.”
European Commission. 2024. “2024 Ageing Report.” Luxembourg: Publications Office of the European Union.
Gragnani, Jose Antonio, and Heinz Rudolph. 2019. “Financial Sector Assessment Program: Poland. Development of Capital Markets and Pension Funds. Technical Note.” The World Bank Group.
KNF. 2023. “Report on the Activities of the UKNF and the KNF Board in 2022.”
Krogulski, Krzysztof, Robert Sierhej, Francisco Vazquez, and Csaba Feher. 2014. “The Polish Pension System: Fiscal Impact of the 2014 Changes and Remaining Policy Challenges.” International Monetary Fund. IMF Country Report No. 14/174.
Lewandowski, Piotr. 2018. “Case Study: Gaps in Access to Social Protection for People Working under Civil Law Contracts in Poland.” Luxembourg: Publications Office of the European Union.
Mercer CFA Institute. 2023. “Global Pension Index 2023.”
OECD. 2022. “OECD Pensions Outlook 2022.” Paris: OECD Publishing. https://doi.org/10.1787/20c7f443-en.
———. 2023a. “Pensions at a Glance 2023. OECD and G20 Indicators.” Paris: OECD Publishing. https://doi.org/10.1787/678055dd-en.
———. 2023b. “Pensions at a Glance 2023: Country Profiles - Poland.”
———. 2023c. “OECD Economic Surveys: Poland 2023.” Paris: OECD Publishing. https://doi.org/10.1787/6fc99a4b-en.
Osinski, Jacek, and Dobieslaw Tymoczko, eds. 2007. “Financial System Development in Poland 2005.” Warsaw: National Bank of Poland.
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Sobolewski, Paweł, and Dobiesław Tymoczko, eds. 2012. “Financial System Development in Poland 2010.” Warsaw: National Bank of Poland.
Social Insurance Institution (ZUS). 2022. “Social Security in Poland.” Edited by Rusiecka Agnieszka. Warsaw.
———. 2023. “Social Security in Poland.” Edited by Rusiecka Agnieszka. Warsaw.
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In 2022, the general pension system covered 86.6 percent of pension expenditures (85.5 percent of pensioners); the farmers’ pension system covered 6.5 percent of pension expenditures (10.3 percent of pensioners); and the pension scheme for security provision system covered 6.9 percent of pension expenditures (4.2 percent of pensioners). The pension scheme for the security provision system does not rely on contributions and is entirely financed from the state budget (Economic Policy Committee Ageing Working Group 2023).
Source: Polish Financial Supervisory Authority (Komisja Nadzoru Finansowego, KNF), quarterly bulletin on pension funds, 2024Q1.
Public pension expenditure includes the general pension system, the farmers’ pension system, and the pension scheme for the security provision systems.
The replacement rate – the ratio of the first pension of those who retire each year over an economy-wide average wage at retirement – is projected to decline from 58 percent in 2022 to about 27 percent in 2050 and stabilize afterward (Text Figure 1, graphs 4 and 6)
While pensions are calculated based on the NDC formula since 2013, calculations are influenced by the “initial capital” – the calculation of capital earned before the introduction of the pension reform in 1999 plus its indexation.
The decomposition of factors behind the change in the projected public pension expenditure between 2022 and 2050 suggests a cumulative dependency ratio effect of 6.3 ppts of GDP (Economic Policy Committee Ageing Working Group 2023).
In 2023, the minimum pension was PLN 1,588.44 (Social Insurance Institution (ZUS) 2023, p. 67).
See (Department of statistics and actuarial forecasts 2023) for details.
TRR is defined as the level of pension entitlements people would receive in the first year after retirement, measured as a percentage of individual earnings the year before retirement. TRRs can be used for scenario comparisons and typically reflect the income-maintenance dimension of pension adequacy.
Source: ZUS data. Self-employed defined as persons conducting non-agricultural business activity and persons collaborating with them. Persons under the civil law contracts defined as persons employed under a mandatory contract or agency contract or other contract for the provision of services.
For contract of mandate: if an individual works under multiple contracts of mandate or contract of mandate overlaps with an employment contract, then social security contributions are required to be made from earnings up to minimum wage. For contracts to perform specified work: as this contract does not require any social contribution to be paid, workers working solely under a contract of specified work are excluded from various social protection rights and no pension contributions are made (Lewandowski 2018, page 20).
Equities include here stocks, pre-emptive rights, bonds convertible to stocks. For details see Sobolewski and Tymoczko (2012, p131-132).
The regulatory changes also included a redirection of contributions to Pillar 1 and centralization of the payout phase in Pillar 1, among others.
Source: KNF quarterly bulletin data. In level terms, OFEs’ assets grew gradually from PLN 180 bn in 2017 to PLN 222 bn in March 2024.
